Bank of India has classified Reliance Communications’ loan account as fraudulent, following similar allegations by the State Bank of India (SBI) against Anil Ambani, based on fund diversion claims in 2016. The Bank of India had sanctioned a ₹700 crore loan in August 2016 for capital and operational expenses, but it was revealed that half of this amount was improperly invested in a fixed deposit, violating the loan agreement.
On August 22, Reliance Communications received a notification from Bank of India stating that the company’s and its former directors’ loan accounts, including Anil Ambani’s, were classified as ‘Fraud’. This comes after SBI‘s allegations in June about misappropriation of funds resulting in significant losses.
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The Central Bureau of Investigation (CBI) subsequently conducted searches related to these claims and registered a complaint after SBI reported a loss of ₹2,929.05 crore due to Ambani’s alleged misappropriation. Ambani’s spokesperson has denied the allegations, noting that he was a non-executive director during the timeframe in question and not involved in daily operations.
The representative noted that SBI had earlier discontinued actions against five other non-executive directors, suggesting that Ambani is being unfairly singled out. Additionally, Reliance Telecom Ltd, a subsidiary of Reliance Communications, has been served a notice regarding fraudulent loan accounts. When classified as fraudulent, accounts are referred to enforcement agencies, and the borrower cannot obtain new financing for five years. Reliance Communications became a non-performing asset (NPA) as of June 30, 2017, with outstanding dues of ₹724.78 crore, and is currently undergoing insolvency proceedings led by a Committee of Creditors, including SBI.
