Canara Bank withdraws order classifying Anil Ambani’s loan account ‘fraudulent,’ informs Bombay High Court | Mint

Canara Bank on Thursday, 10 July 2025, informed the Bombay High Court that the institutional lender has withdrawn its order classifying a loan account of Reliance Communications linked to Anil Ambani as ‘fraudulent’, reported the news agency PTI. 

The legal bench comprising Justice Revati Mohite Dere and Justice Neela Gokhale disposed of Anil Ambani’s petition challenging the bank’s order, after the disclosure was filed in the Bombay High Court, saying that nothing survives in it.

The court also directed that the withdrawal of the order will also be informed to the banking regulator, the Reserve Bank of India, according to the agency report.

According to Mint’s earlier report, Reliance Communications is currently undergoing insolvency proceedings, and Anil Ambani used to be the firm’s former director. 

As per the exchange filing on 2 July 2025, the State Bank of India decided to classify Reliance Communications’ loan account as “fraud” and is looking to report the company’s former director, Anil Ambani, to the banking regulator, the Reserve Bank of India (RBI).

Canara Bank’s case on the loan account

Canara Bank classified the loan account of Reliance Communications as “fraud” and claimed that the loan of ₹1,050 crore was “routed” to a group company to pay off other liabilities to connected or related companies, according to the agency report.

The order was based on the RBI’s master circular on fraud accounts, which provides a guideline for such declarations. The Bombay High Court stayed the order pending the hearing of the plea.

The reports also suggest that the High Court questioned whether the RBI would take action against the bank, which defied its master circular, and also on the Supreme Court’s ruling, which mandates that borrowers must be given a hearing before their accounts are declared as ‘fraudulent.’

Anil Ambani challenged the order and argued that the fraud classification was issued on 8 November 2024, but was only communicated to him on 25 December 2025, after the High Court put a stay on a similar decision, as per the agency report.

Ambani also claimed that Canara Bank had informed the RBI about the fraud classification on 6 September 2025, before officially issuing the order, as per the news report.