Reliance Communications (RCom) has revealed that the State Bank of India (SBI) has classified its loan account as “fraud” and intends to report both the company and its former director, Anil Ambani, to the Reserve Bank of India (RBI).
Background:
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The loans in question date back to August 2016.
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RCom is currently under Corporate Insolvency Resolution Process (CIRP) since 2019.
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A resolution plan is pending final approval from the National Company Law Tribunal (NCLT).
SBI’s Action:
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After reviewing RCom’s explanations, SBI found:
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Non-compliance with loan terms.
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Irregularities in the handling of the loan accounts.
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SBI’s Fraud Identification Committee decided:
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To classify the account as fraud.
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To report the case to the RBI, including Anil Ambani’s name as part of key managerial personnel, as required by RBI norms.
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RCom’s Defense:
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The company argues the loans were from before CIRP and fall under protections provided by Section 32A of the Insolvency and Bankruptcy Code (IBC).
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Section 32A offers immunity to the corporate debtor for offences committed prior to the insolvency process once a resolution plan is approved.
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RCom maintains that such matters should be resolved within the framework of the resolution plan or liquidation.
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The company is now seeking legal counsel.
Previous Developments:
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In November 2024, Canara Bank had similarly flagged RCom’s account as fraud.
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The Bombay High Court put a stay on Canara’s action in February 2025, ruling that the bank failed to provide a hearing to the company as required by RBI guidelines.
Key Implications:
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The SBI move adds legal and reputational pressure on RCom and Anil Ambani.
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It could delay or complicate NCLT’s approval of the resolution plan.
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The case underscores a growing trend of banks acting against loan defaulters even during insolvency proceedings, especially where pre-CIRP misconduct is alleged.
The outcome may depend heavily on the interpretation of Section 32A protections and procedural adherence by banks under RBI’s Master Directions.
