New Delhi, September 5, 2025 — In a dramatic escalation of Reliance Communications’ (RCom) financial woes, Bank of Baroda has formally classified the loan accounts of the company and its former non-executive director, Anil Ambani, as “fraud.” This follows prior similar classifications by SBI and Bank of India, intensifying scrutiny of the telecom giant’s pre-insolvency loans.
What’s the Latest?
- Bank of Baroda delivered the fraud designation via an exchange filing dated September 2, received by RCom on September 3. The bank cited RBI’s 2024 Fraud Risk Management guidelines as the basis for its decision.
- This joins State Bank of India (SBI) and Bank of India (BoI), both of which had earlier flagged RCom’s accounts. SBI’s warning came in June, pointing to suspected fund diversion in 2016, while BoI raised its fraud flag in August.
What RCom & Anil Ambani Said
- RCom clarified the loans in question are from before the Corporate Insolvency Resolution Process (CIRP) began and must be resolved under the resolution plan or liquidation as per the Insolvency and Bankruptcy Code (IBC).
- Anil Ambani’s spokesperson strongly denied any wrongdoing. They emphasized that he served only as a non-executive director from 2006 to 2019 and never played a day-to-day operational role. They accused the banks of acting “selectively” and “staggeredly” after a decade.
Wider Legal & Regulatory Fallout
- RCom reaffirmed it is under the control of Resolution Professional Anish Niranjan Nanavaty and overseen by a Committee of Creditors (CoC). A resolution plan was approved in March 2020, but final clearance from the National Company Law Tribunal (NCLT) and Supreme Court is pending.
- Meanwhile, the Central Bureau of Investigation (CBI) has registered a criminal case following an SBI complaint of ₹2,929 crore loan fraud. Raids were conducted across Ambani-linked premises.
Why This Matters
| Aspect | Significance |
|---|---|
| Financial Risks | Fraud designation complicates debt resolution and may bar access to further loans for five years. |
| Legal Consequences | Opens door to criminal cases and regulatory scrutiny under RBI’s fraud guidelines. |
| Investor Sentiment | RCom share prices are impacted by rising uncertainty; resolution road is long. |
| Governance Questions | Raises questions about director liabilities and governance gaps. |
What Happens Next?
- Legal Reviews & Appeals: RCom and Ambani’s team will likely contest the classification. Clarifications and appeals will be crucial.
- Impact on Resolution Process: If the fraud tag is upheld, the resolution plan and value realization may face serious complications.
- Regulatory Action: BoB will report the fraud to RBI as per norms. Related actions may emerge from other investigating agencies.
- Crisis Intensifies: With conflicting bank actions and pending court approvals, RCom’s road ahead remains precarious.