Bank of India Labels RCom, Ambani Fraudulent

Bank of India (BoI) has declared the loan account of Reliance Communications (RCom) as fraudulent, naming its former director, Anil Ambani, and other erstwhile directors in connection with alleged fund diversion in 2016. This follows a similar move by the State Bank of India (SBI) in June 2025, intensifying scrutiny on the insolvent telecom company and its former leadership.

According to a regulatory filing by RCom, BoI disbursed Rs 350 crore of a Rs 700 crore loan sanctioned in August 2016 for capital and operational expenditure and repayment of existing liabilities. However, the bank alleges that these funds were misused, with a significant portion invested in a fixed deposit, violating the terms outlined in the sanction letter. BoI’s letter, dated August 8 and received by RCom on August 22, formally classified the loan accounts of RCom, Anil Ambani, and former director Manjari Ashok Kacker as fraudulent.

This development comes on the heels of SBI’s earlier classification of RCom’s account as fraudulent, citing misappropriation of funds worth Rs 2,929.05 crore. Following SBI’s complaint, the Central Bureau of Investigation (CBI) conducted searches on Saturday at premises linked to RCom and Ambani’s residence. The CBI’s action underscores the severity of the allegations, which involve transactions that allegedly breached loan agreements.

Also Read: CBI Targets Anil Ambani’s RCOM in Rs 2,000-Cr Fraud Probe

Anil Ambani, the younger brother of Mukesh Ambani, Asia’s richest man, has denied the accusations. His spokesperson stated, “Anil Ambani strongly refutes all allegations and will defend himself vigorously. The matters relate to events over a decade old when he served as a non-executive director with no role in daily operations.” The spokesperson highlighted that SBI had withdrawn proceedings against five other non-executive directors, questioning why Ambani was singled out.

RCom’s subsidiary, Reliance Telecom Ltd (RTL), also received a similar fraud classification from BoI, implicating its current director Grace Thomas and others. Under Indian banking regulations, a fraud declaration triggers severe consequences, including referral to enforcement agencies for criminal investigation and a five-year ban on the borrower accessing fresh financing from banks and regulated institutions.

RCom’s financial troubles are not new. The company’s loan account turned non-performing asset (NPA) on June 30, 2017, with an outstanding debt of Rs 724.78 crore to BoI alone. As of March 2025, RCom’s total debt stood at a staggering Rs 40,400 crore, according to an April disclosure. The company is currently undergoing insolvency proceedings under the Insolvency and Bankruptcy Code, managed by a Committee of Creditors led by SBI and supervised by a Resolution Professional.

The fraud allegations add to the challenges faced by Anil Ambani, whose business empire has been under strain for years. Once a prominent figure in India’s telecom and infrastructure sectors, Ambani’s companies, including RCom, have struggled with mounting debts and operational setbacks. The ongoing investigations and fraud classifications could further complicate efforts to resolve RCom’s insolvency, as creditors push for recovery of dues.

As the CBI probes deeper and enforcement actions loom, the case highlights the complexities of corporate governance and financial oversight in India’s banking sector. For now, Ambani and RCom remain under a cloud of legal and financial scrutiny, with stakeholders awaiting the outcome of these high-stakes proceedings.

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