SBI calls out Reliance Communications’ loan account as ‘fraud’; bank to report Anil Ambani’s name to RBI | Mint

India’s largest state-run bank, State Bank of India (SBI), on 23 June 2025 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), the company said in an exchange filing. 

As per the details shared in the letter to Reliance Communications, the bank’s Fraud Identification Committee (FIC) has decided to classify the loan account as ‘fraud’ due to the deviation in the utilisation of the loan funds.

Reliance Communications, Reliance Infratel (subsidiary), and Reliance Telecom (subsidiary) have cumulatively received ₹31,580 crore in loans from banks.

What did SBI FIC find?

State Bank of India‘s FIC witnessed two ‘major’ deviations in the loan taken and utilised by the company.

Reliance Communications received a loan of ₹250 crore from Dena Bank on 8 February 2017, citing “short-term cash flow mismatch for payment of statutory dues, sundry creditors”. 

Instead of using the funds for the officially mentioned reasons, the company allegedly used the loans to pay the PSU-firm RailTel Corporation of India (RCIL) as an Inter-Corporate Deposit (ICS) or an unsecured loan that one corporate entity grants to another.

According to the filing, Reliance Communications management later claimed that the amount was used to repay an External Commercial Borrowing (ECB) taken from BNP-Paribas.

“Thus, loan was not used for the purpose it was availed,” said SBI’s Fraud Identification Committee, stating that it appears that there was a “routing of transaction” through a subsidiary or an associate company to conceal the source of funds to avoid regulatory approval in the ECB loans case.

India Infrastructure Finance Company Ltd (IIFCL) also sanctioned a ₹248 crore loan to fulfil its capital expenditure needs. However, Reliance Communications allegedly paid ₹63 crore to RITL and ₹77 crore to RIEL to repay some loans.

“Instead of transferring the fund directly to these companies it was routed through RCIL, reason for that has not been given by management by Ambani,” said SBI’s FIC, highlighting that these were the two transactions that appear to be misappropriation of funds and a breach of trust.

Reliance Comms’ utilisation of bank loans

According to the official filing, out of the ₹31,580 crore from banks, ₹13,667.73 crore was used for the repayment of loans and other obligations to the banks or financial institutions, which marked 44 per cent of the total outstanding debts.

The investigations also revealed that the company allegedly used 41 per cent of the loans, or ₹12,692.31 crore, to pay connected parties.

“Utilisation of funds obtained from banks was traced and its utilisation was mapped from sanction letter. Instances were identified where utilisation of loan amount was not a per term mentioned in Sanction Letter,” according to the official release.

SBI’s Fraud Identification Committee found that ₹6,265.85 crore loans obtained from the bank were used to repay other bank loans. Moreover, ₹5,501.56 crore obtained from the bank loans were utilised for payment to related and connected parties.

The company invested funds of ₹1,883.08 crore taken from bank loans, and most of those investments were liquidated immediately and used for payments to related and non-related parties.

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