In a major move, the State Bank of India, has officially declared Reliance Communications (RCom) and its promoter, Anil Ambani as fraud. SBI’s special Fraud Identification Committee took this decision on June 13, 2025, and informed the Reserve Bank of India (RBI) on June 24. This now opens the way for strict legal action, with the Central Bureau of Investigation (CBI) set to investigate further.
Why Did SBI Take This Step?
According to SBI, RCom borrowed massive amounts but did not use the money as intended. An audit revealed that around ₹31,580 crore was lent to RCom, but nearly 41% of these funds were transferred to other group companies rather than being used for their agreed purposes. This violated the terms set between the bank and the company. SBI still has about ₹2,227 crore in outstanding loans and bank guarantees worth ₹786 crore.
What Is RCom’s Current Situation?
RCom has been under insolvency proceedings since 2019, meaning the company has been unable to repay its loans and is awaiting a court-approved resolution plan. This plan is still pending final approval from the National Company Law Tribunal (NCLT). Earlier, in September 2024, Canara Bank also declared RCom as fraud, but SBI’s step is even more significant due to its position as India’s top lender.
What Does Anil Ambani Say?
Anil Ambani’s legal team claims that SBI did not follow due process. They argue he was just a non-executive director and did not handle day-to-day operations. His lawyers say he was not given a proper chance to present his case before being labeled as fraud, which, according to them, goes against Supreme Court guidelines.
Impact on Telecom Competitors and Other Companies
This news serves as a warning to other large corporate borrowers. RCom once competed with Bharti Airtel, Vodafone Idea, and now Reliance Jio, which is run by Anil Ambani’s brother, Mukesh Ambani. While RCom has collapsed, rivals like Jio and Airtel have become stronger. Many experts believe that poor management and misused funds led to RCom’s downfall, whereas Jio’s effective strategies transformed India’s telecom industry.
Other Banks May Take Similar Actions
Following SBI’s action, other banks with exposure to RCom may also classify their accounts as fraud. This could spark more legal battles and attempts to recover funds. The CBI’s investigation will also look into whether other Reliance Group companies were involved in any wrongdoing. If fraud is conclusively proven, there could be stricter punishments and stronger recovery measures.
What Happens Next?
This major fraud declaration shows that banks are adopting a tougher stance against misuse of public funds. It also serves as a lesson to major company promoters to adhere to proper practices. Now, attention is on how the NCLT will decide on the insolvency plan and whether Anil Ambani will have a chance to clear his name. Meanwhile, Reliance Jio, Airtel, and other telecom competitors are expected to remain strong and seek any market share left behind by RCom
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