Mumbai: The Bombay High Court has dismissed a plea by businessman Anil Ambani that challenged the State Bank of India’s (SBI) decision to classify the loan account of Reliance Communications (RCom), which he leads, as fraudulent.
The ruling, delivered by Justices Revati Mohite Dere and Neela K Gokhale, upheld the SBI’s action, stating that the bank adhered to the Reserve Bank of India (RBI) guidelines and that the classification aligned with regulatory requirements.
The Fraud Classification
As per the reports, On June 13, 2025, SBI flagged RCom’s loan account as fraudulent, citing allegations of misappropriation of funds through transactions that violated loan terms. RCom, currently under insolvency proceedings, was accused of alleged diversion of funds, breach of covenants and engaging in related-party transactions. These actions were flagged under the RBI’s Master Directions on Fraud Risk Management.
According to RBI circulars, banks are required to utilise the Central Fraud Registry for identifying, monitoring, reporting and mitigating fraud risks. Once an account is classified as fraudulent, the bank must report it to the Central Repository of Information on Large Credits (CRILC) platform to alert other lenders. Additionally, if a bank independently categorises an account as fraudulent, it must notify the RBI within 21 days and refer the matter to an investigating agency.
The Allegations and CBI Probe
The SBI specifically alleged that Ambani misappropriated bank funds by entering into prohibited transactions. Following the bank’s complaint from its Mumbai branch, the Central Bureau of Investigation (CBI) conducted searches on premises linked to RCom and Ambani’s residence, according to the reports. In August, the CBI registered a case against Ambani for alleged bank fraud, estimating a loss of over Rs 2,929 crore to SBI.
The SBI has also filed a complaint with the CBI in connection with the fraud classification, ensuring compliance with regulatory mandates.
Classified Fraud in 2020 Too
This is not the first instance of such charges against Ambani and RCom. In November 2020, SBI had previously classified the account and Ambani as fraudulent. However, a “status quo” order from the Delhi High Court forced the bank to reverse the decision.
The Case with NCLT Now
As per the reports, the SBI’s exposure to RCom remains significant, with a fund-based principal outstanding of Rs 2,227.64 crore, plus accrued interest and expenses dating back to August 26, 2016. This is supplemented by a non-fund-based bank guarantee amounting to Rs 786.52 crore.
The case is currently before the National Company Law Tribunal (NCLT) in Mumbai, where SBI’s complaint is under review. Separately, personal insolvency resolution proceedings against Anil Ambani are also ongoing at the NCLT in Mumbai.
