Days
after State Bank of India (SBI) classified Reliance Communications Ltd’s (RCom) loan accounts as fraudulent, another State-run lender Bank of India (BoI) has also flagged loans of the debt-ridden telecom company, its promoter Anil Ambani and associated entities as fraud. In a disclosure to stock exchanges, RCom says that, last week, it had received a letter from BoI informing the company that the Bank had decided to treat its loan account as fraudulent along with those of Mr Ambani and former director Manjari Ashok Kacker.
According to BoI, RCom’s loan account turned non-performing on 30 June 2017 with an outstanding balance of Rs724.78 crore. The Bank says that, despite repeated follow-ups, the company and its guarantors failed and neglected to repay the dues. BoI also issued a separate order against Reliance Telecom Ltd (RTL), an RCom subsidiary, classifying its loan account as fraud with an outstanding of Rs51.77 crore. The notice also named directors Grace Thomas and Satheesh Seth, as well as Gautam Bhailal Doshi, Dagdulal Kastruchand Jain and Prakash Shenoy in connection with the default.
The decision followed a forensic audit carried out by BDO India LLP covering the period from April 2013 to March 2017. The audit pointed to diversion of funds, misuse of borrowings and violations of loan terms.
One of the key findings was that Rs350 crore disbursed in October 2016 for operational and capital expenditure was instead placed in fixed deposits which was not permitted under the sanction conditions.
The audit further noted that in 2015, loans of over Rs660 crore from BoI and Standard Chartered were parked in fixed deposits and then recycled through additional borrowings to pay spectrum fees, an arrangement that was not in line with the stated loan purpose.
In RTL’s case, investigators say that Rs50 crore disbursed in December 2016 was transferred to RCom in the form of inter-corporate deposits, a clear diversion of funds to related parties against the sanction terms.
After reviewing the audit findings, BoI concluded that the loans had been mis-utilised and that the transactions reflected fraudulent intent. It said that the accounts had been reported to relevant authorities and law enforcement agencies for further action.
The development comes even as central bureau of investigation (CBI) has intensified its probe into RCom’s finances. On Saturday, CBI officials carried out searches at two locations in Mumbai, including Mr Ambani’s residence and the offices of RCom, in connection with a fresh case of bank fraud worth Rs2,929.05 crore registered on 21 August 2025 following a complaint by SBI.
The complaint accused RCom, Mr Ambani, unidentified public servants and others of cheating the Bank by misrepresenting facts to secure loans. Investigators have alleged that the borrowed funds were diverted through inter-company loan transactions, inter-corporate deposits, misuse of sales invoice financing and discounting of RCom bills by Reliance Infratel, besides the write-off of advances to Netizen Engineering Pvt Ltd, another company under the Reliance ADA group.
RCom, which has been under corporate insolvency resolution since 2019, in its filing says that the loans referred to by BoI relate to a period before the insolvency process began. It stated that a resolution plan has been approved by creditors and is currently awaiting clearance from the national company law tribunal (NCLT) in Mumbai. The company added that under Section 32A of the Insolvency and Bankruptcy Code (IBC), once a resolution plan is approved, the corporate debtor is granted immunity from prosecution for offences committed prior to the commencement of insolvency proceedings.
Anil Ambani, who has faced repeated scrutiny over the collapse of his telecom empire, has rejected allegations of wrongdoing. A spokesperson for him described the charges as baseless and said he would defend himself through due process.
Once one of India’s top telecom operators, RCom and its subsidiaries collectively borrowed close to Rs31,580 crore from a consortium of banks before being pushed into insolvency under mounting debt and intense competition. The latest classification by BoI marks another blow to the group’s efforts to resolve its legacy debt and adds to the mounting legal troubles facing Ambani and his Reliance Anil Dhirubhai Ambani (ADA) group.
In July 2025, the Union government confirmed in Parliament that SBI has officially classified the loan account of RCom as 'fraud' and has reported the name of the company's former director Anil Dhirubhai Ambani to Reserve Bank of India (RBI), following due regulatory process.
SBI’s total exposure to the troubled telecom company stands at over Rs3,000 crore. This includes Rs2,227.64 crore in fund-based principal outstanding, along with Rs786.52 crore in non-fund-based bank guarantees, the government says.
The government confirmed that SBI reclassified the account as fraud on 13 June 2025 in accordance with RBI’s master directions on fraud risk management and SBI’s own board-approved policy on classification, reporting, and management of frauds. This decision was reported by the resolution professional of RCom to the stock exchanges on 1 July 2025, as part of regulatory disclosure obligations.
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