India’s biggest lender is turning up the heat on the former telecom giant, dragging its ex-director into the regulatory spotlight as the shadow of insolvency deepens.
The long-simmering troubles of Reliance Communications just took a sharp legal turn. State Bank of India has formally branded the company’s loan account as “fraud” and is reporting former director Anil Ambani to the Reserve Bank of India under mandatory disclosure rules, the company said in a stock exchange filing on Tuesday evening.
The move could mark the beginning of a much more aggressive phase in one of India’s most high-profile corporate collapses — a saga that’s already spanned nearly a decade, marred by debt, courtroom drama, and the fall of a once-dazzling empire helmed by one of the country’s most recognized business names.
Letter Lands, Alarm Bells Ring
The letter from SBI, dated June 23 and received by Reliance Communications on June 30, doesn’t mince words. The lender, acting in line with Reserve Bank of India (RBI) guidelines, accused the company of not clarifying key discrepancies linked to loans dating back to 2016. SBI, as the lead bank in a consortium of lenders, has decided to tag the account as fraudulent.
The company’s stock exchange disclosure was terse but telling.
“The Company has received a letter dated June 23, 2025 (received on June 30, 2025) from SBI… stating that SBI has decided to report the loan account of the Company as ‘fraud’ and to report the name of Shri Anil Dhirajlal Ambani… to the RBI,” it said.
One sentence. That’s all it took to reignite fresh scrutiny of the embattled Reliance Group scion.
Insolvency, Inertia, and a Cloudy Comeback
Reliance Communications, once a titan in India’s telecom space, has been undergoing insolvency proceedings since 2019. Its debts had crossed ₹45,000 crore (approx. $5.4 billion) at the time, and despite various rounds of bidding and resolution plans, there’s still no clean break or full-scale exit in sight.
The company insists the loan in question predates the insolvency process and falls within a period when Ambani was still a director.
But that timeline doesn’t seem to matter anymore.
In regulatory terms, once a loan is tagged as fraud — no matter when the alleged missteps occurred — the consequences are grave. Personal liability becomes a very real risk. And for Anil Ambani, who’s already declared in court that he has minimal personal wealth, that spotlight is now blazing.
What Happens When a Loan Is Called Fraud?
Tagging a corporate account as “fraud” isn’t a cosmetic label. Under RBI’s Master Directions on fraud classification, such accounts undergo a series of escalated regulatory and legal procedures. These include criminal investigation, mandatory reporting to central fraud monitoring agencies, and potential restrictions on related parties from accessing banking services.
Here’s what that generally triggers:
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The company’s directors and key executives may face formal scrutiny by investigative agencies.
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Recovery mechanisms — including asset seizures — can be pursued more aggressively.
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Financial institutions are obligated to flag the named individuals across the system, affecting their ability to hold board positions or secure fresh credit.
It’s rare but not unprecedented.
Anil Ambani’s Legal Dance Continues
Anil Ambani’s journey from billionaire to legal battler has been anything but quiet.
In 2020, he told the Delhi High Court that he owned virtually nothing — no significant personal income, and not a single luxury vehicle. The claim came during enforcement proceedings over debts owed to Chinese banks. He was later found in contempt of court in a separate Ericsson-related matter before being bailed out by elder brother Mukesh Ambani, who stepped in with a last-minute payment.
Now, with SBI dragging his name into a fraud report to India’s central bank, the heat is officially back on.
One person close to the matter said, “This could have major implications on his directorships, including future access to any resolution plans pending final nods.”
That legal advice Reliance Communications said it was seeking? It better come fast.
The Bigger Financial Picture
India’s banking system has made aggressive strides in reducing bad loans in the last few years. According to the RBI’s latest Financial Stability Report, gross non-performing assets (GNPA) as a percentage of total loans dropped to 2.8% in March 2025 — down from 11.2% in 2018.
That clean-up has also meant more stringent enforcement against legacy defaulters.
Here’s a snapshot of Reliance Communications’ debt status since insolvency:
| Fiscal Year | Total Debt (₹ crore) | Resolution Status | Key Development |
|---|---|---|---|
| FY2019 | 45,000+ | Insolvency filed | NCLT admitted case |
| FY2020 | 37,000 | Resolution pending | Bharti Airtel, UV Asset bidders |
| FY2023 | 29,000 | Still unresolved | Assets under control of lenders |
| FY2025 | Unchanged | Final approval awaited | SBI files fraud tag |
There’s been motion, sure. But little progress.
Backlash Brews Among Shareholders
Retail investors, many of whom held on to RCom shares during its downward spiral, voiced fury across social media platforms after Tuesday’s disclosure.
“First, no resolution for years. Now a fraud tag? Why wasn’t this caught earlier?” one user posted on X, tagging both the company and the finance ministry.
Others pointed out the irony: the company still trades, albeit as a penny stock, while some institutional lenders have already written off massive amounts from their books.
The official resolution plan has been stuck in red tape, awaiting approval from the National Company Law Tribunal (NCLT). With the fraud classification now in play, there’s growing fear the process could face further delays — or worse, collapse entirely.
Where This Could Lead
Analysts are already split. Some say it’s a routine regulatory step, a box that SBI had to tick under RBI’s framework. Others say it opens the door to a broader investigation — and potentially, criminal charges.
“This looks procedural, but don’t underestimate the optics,” said one Mumbai-based banking analyst. “The moment Anil Ambani’s name goes to RBI in a fraud context, it’s game over for any future turnaround play.”
As the heat intensifies, Anil Ambani’s corporate future looks more fragile than ever. And for Reliance Communications — a company that once promised to revolutionize Indian telecom — the shadows just got longer.
