Anil Ambani
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In a major setback for Reliance Group chairman Anil D. Ambani, the State Bank of India (SBI) has decided to go after him by classifying its loan account of Reliance Communications Ltd. (RCom) as fraud.
The country’s largest public sector lender has also decided to report Mr. Ambani, the erstwhile director of RCom, to the Reserve Bank of India (RBI) seeking appropriate action as per the central bank’s guidelines.
The move follows a forensic audit by the bank and exchange of show-cause notices and responses spanning over a year.
SBI, in a letter to RCom, intimated that its Fraud Identification Committee (FIC) had decided to classify the account as fraudulent and it had escalated the matter to the banking regulator for necessary action.
The FIC’s report has mentioned about significant irregularities, including fund diversion and violations of the terms and conditions of the loan.
SBI’s action is in line with the RBI’s Master Direction on Frauds, which provides a framework to deal with entities involved in gaming the banking system. Mr. Ambani is expected to face regulatory and legal action including civil and criminal proceedings and the case might be handed over to the Central Bureau of Investigation (CBI) for further investigation. RCom, which had turned a non-performing asset (NPA), was admitted to the IBC process in May 2018, and as of March 2025, had a total debt of ₹48,216 crore.
Under Section 32 A of the IBC, the company is protected from any action but its promoter faces liability and criminal proceedings. SBI’s FIC on June 13, 2025 identified a consistent pattern of financial misconduct and found that RCom and its subsidiaries were engaged in fund diversion and opaque transactions. The forensic audit had revealed large scale diversion of the bank’s funds which were channelled through related entities, temporarily parked in mutual funds and fixed deposits and cycled via day-to-day transactions. Mr. Ambani’s lawyers have denied the allegations.
“State Bank of India’s order referred in the RCom disclosure is shocking and has been passed ex-parte, and in violation of the principles of natural justice,” his counsel, Tarini Khurana, said in response to SBI’s letter to RCom.
“SBI’s order is in direct contravention of various judgments of the Hon’ble Supreme Court and the Hon’ble Bombay High Court, as well as RBI guidelines,” she said.
“SBI has not even responded to Mr. Ambani’s communication about the invalidity of the Show Cause Notice (SCN) for almost a year, and has not even provided the information forming the basis of their decision despite being repeatedly requested by Mr. Ambani, to enable him to respond to the SCN,” she said.
“SBI has also not allowed Mr. Ambani an opportunity of personal hearing to make submissions against its allegations,” she added.
“SBI has withdrawn the show cause notice to other non-executive and independent directors of RCOM. Mr. Ambani was also a non-executive director and not involved in the day-to-day affairs of RCOM, and has been wrongly so categorised,” she further said. Mr. Ambani is pursuing the matter as legally advised.
Published – July 02, 2025 10:10 pm IST