SBI’s Fraud Classification of Reliance Communications

The State Bank of India (SBI) has officially classified Reliance Communications and its promoter, Anil D Ambani, as “fraud.” This classification was disclosed to the Parliament on Monday, highlighting the bank’s ongoing efforts to address financial discrepancies. The entities were labeled as fraudulent on June 13, 2025, in alignment with the Reserve Bank of India’s (RBI) Master Directions on Fraud Risk Management and SBI’s internal policies. Minister of State for Finance, Pankaj Chaudhary, confirmed this in a written response to the Lok Sabha.

Complaint Process with CBI

Following the fraud classification, SBI reported the matter to the RBI on June 24, 2025, and is in the process of lodging a formal complaint with the Central Bureau of Investigation (CBI). This step underscores SBI’s commitment to pursuing legal recourse and ensuring accountability. Additionally, on July 1, 2025, the Resolution Professional for Reliance Communications informed the Bombay Stock Exchange about this development as part of disclosure compliance.

Financial Exposure and Insolvency Proceedings

SBI’s financial exposure to Reliance Communications includes a fund-based principal outstanding amount of Rs 2,227.64 crore, along with accrued interest and expenses dating back to August 26, 2016. There is also a non-fund based Bank Guarantee of Rs 786.52 crore involved. Reliance Communications is currently undergoing a Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016. The resolution plan has been approved by the Committee of Creditors and filed with the National Company Law Tribunal (NCLT), Mumbai, awaiting approval since March 6, 2020.

Personal Insolvency Proceedings Against Anil Ambani

In addition to corporate proceedings, SBI has initiated a Personal Insolvency Resolution Process against Anil D Ambani under the IBC framework. This case is being heard by NCLT Mumbai. Previously, both Reliance Communications and Anil Ambani were classified as fraudulent on November 10, 2020, with a complaint filed to CBI on January 5, 2021. However, this complaint was returned due to a ‘status quo’ order from the Delhi High Court dated January 6, 2021.

Supreme Court Ruling and Reclassification

A Supreme Court judgment on March 27, 2023, in the case of State Bank of India & Others Vs Rajesh Agarwal & Others mandated that lenders must provide borrowers an opportunity to present their case before classifying accounts as fraud. Consequently, SBI reversed its fraud classification on September 2, 2023. After adhering to due process per an RBI circular dated July 15, 2024, the account was reclassified as fraud.