BoB joins SBI and BOI in classifying Reliance Communications as fraud account

MUMBAI: Reliance Communications (RCom) and its former non-executive director Anil Ambani have been classified as “fraud” accounts by Bank of Baroda, adding to similar actions already taken by State Bank of India and Bank of India. The decision follows a series of forensic reviews, show-cause notices, and hearings stretching over more than a year.


According to RCom’s filing with the BSE and NSE on Sept 4, the bank’s order dated Sept 2 declared the company’s loan account and Ambani’s personal guarantees fraudulent, citing irregularities highlighted in a forensic audit by BDO India LLP.


The process began in Jan 2024, when BoB issued a show-cause notice to RCom’s directors based on the audit findings.


The forensic audit by BDO India LLP found that Reliance Communications had misused borrowed funds, diverted loan proceeds through unauthorized channels, engaged in related-party transactions without commercial justification, and recycled money through layered transactions to conceal fund flows, including irregular joint venture entries and cross-dealings with group entities. Based on these findings, Bank of Baroda classified RCom’s account as fraud, with Rs 1,656.07 crore in exposure against a sanctioned limit of Rs 2,462.50 crore as of Aug 28, 2025.


Ambani’s representatives sought a copy of the forensic report, arguing that without it they could not respond effectively. The bank eventually provided the report in June 2024 and granted multiple extensions, but after receiving no timely reply, it pressed ahead with the proceedings.


Ambani later submitted a detailed response in Jan 2025 and requested a personal hearing. While BoB acknowledged the reply, it found his arguments unsustainable. A writ petition filed in the Bombay High Court temporarily stalled the case, but was later withdrawn, allowing the bank to resume proceedings.


In July 2025, Ambani appeared before the bank’s zonal committee and gave both oral and written submissions. However, BoB concluded that the explanations lacked merit. On Aug 29, it issued a fresh show-cause notice to RCom, followed by a reasoned order on Sept 2 that formally tagged the accounts as fraudulent.


A spokesperson for Ambani said the classification relates to matters over a decade old and stressed that he was never involved in RCom’s day-to-day operations. The statement noted that RCom has been under insolvency proceedings since 2019, with its resolution plan pending before NCLT and the Supreme Court, and accused some lenders of acting in a selective and delayed manner.


The fraud tag bars the company and Ambani from raising fresh credit and paves the way for further regulatory and investigative action. With BoB’s move, three of the country’s largest public sector banks have now branded RCom’s loan accounts fraudulent.