SBI to report Reliance Communications Loan as Fraud to RBI

State Bank of India (SBI) has officially classified Reliance Communications’ loan account as “fraud” and plans to report the company’s former director, Anil Ambani, to the Reserve Bank of India (RBI). The decision was made on June 23, 2025, by SBI’s Fraud Identification Committee (FIC), citing serious discrepancies in the utilization of loan funds.

According to a regulatory filing, the FIC identified two major deviations from the sanctioned use of the ₹250 crore loan granted to Reliance Communications by Dena Bank in February 2017. The loan was initially intended to manage short-term cash flow mismatches for statutory dues and sundry creditor payments. However, instead of utilizing the funds for these purposes, the company allegedly diverted the amount as an Inter-Corporate Deposit (ICD) to RailTel Corporation of India.

Later, the company claimed that the funds were used to repay an External Commercial Borrowing (ECB) from BNP-Paribas. SBI’s committee concluded that the loan was not used for its sanctioned purpose and appeared to have been routed through a subsidiary or associate company to mask the origin and avoid regulatory scrutiny—a move suggestive of fund misappropriation.

Cumulatively, Reliance Communications and its subsidiaries—Reliance Infratel and Reliance Telecom—have borrowed ₹31,580 crore from various banks. The bank’s latest action could result in serious regulatory and legal consequences for Anil Ambani, who helmed the group during the period in question.

The development comes as part of SBI's broader efforts to strengthen its fraud detection mechanisms and uphold financial discipline, especially in high-value corporate loan cases. The case is expected to trigger further regulatory review and could influence the treatment of other distressed corporate loan accounts.