SBI Labels Reliance Communications Loan as Fraud, Flags Anil Ambani to RBI

Reliance Communications Ltd. (RCOM) announced in a regulatory filing on July 1 that the State Bank of India (SBI) had labelled the loan account of RCOM as "fraud" and was taking steps to submit the identity of the company's former director, Anil Dhirubhai Ambani, to the Reserve Bank of India (RBI).

According to SBI's letter dated June 23, 2025, which was attached to the application, the bank's Fraud Identification Committee has determined that the loan account of Reliance Communication Limited is fraudulent.

Reliance Telecom Ltd. (RTL) and other group firms are among the associated entities mentioned in the letter, which was received on June 30. Other irregularities mentioned include possible fund diversion and loan term violations that resulted in the fraud classification.

According to SBI, the decision was made after forensic audits and a review of several show-cause notices.

Response from Reliance Communications

According to Reliance Communications, since 2019, the business has been subject to the corporate insolvency resolution process (CIRP). Creditors have adopted a resolution plan, which is pending National Company Law Tribunal (NCLT) final approval.

According to the SBI letter dated June 23, 2025, the credit facilities or loans mentioned therein relate to the time frame before the CIRP. According to the Insolvency and Bankruptcy Code (IBC), these must be settled either in liquidation or as part of a resolution plan.

As per Reliance Communications, the corporation is shielded from the institution and continuation of any lawsuits or other actions taken against it during the CIRP.

Following the NCLT's acceptance of the resolution plan, the corporation will be immune from liability for any alleged crimes committed before the CIRP begins, according to the protection afforded by Section 32A of the IBC. The business also stated that in light of the latest development, legal counsel is being sought for the future.

Journey of RCOM

Dhirubhai Ambani formed the Reliance Group, which includes the Indian telecom business Reliance Communications Limited which was established in 2004.

Following the Reliance Group split, RCOM, under the leadership of Anil Ambani, provided enterprise services, internet, and mobile and underwater cable connectivity. It suffered from high debt, increased competition, particularly from Reliance Jio, and a declining market share in the late 2010s.

 According to the Insolvency and Bankruptcy Code, the business went through the corporate insolvency resolution process in 2019. Anish Niranjan Nanavaty, a resolution specialist, has been running the company since the board was suspended.

Many of RCom's licences have expired or been surrendered, and the company is still in the process of going bankrupt. Its assets are being evaluated for sale or restructuring in order to pay off its creditors.