SBI Flags RCom Loan as Fraud: Anil Ambani Named in Scandal.

SBI Flags RCom Loan as Fraud

• Anil Ambani Named in RCom Fraud Case

• RCom’s Fall Deepens with Fraud Tag

Unmesh Gujarathi
Sprouts News Exclusive
Contact: +91 9322755098

State Bank of India has flagged Reliance Communications’ loan as fraud and reported Anil Ambani to the RBI, citing irregularities dating back to 2016. Once a telecom giant, RCom collapsed under massive debt. Sprouts News Investigation Team (SIT) highlights the regulatory, financial and legal implications amid Reliance Group’s attempted revival.

SBI Flags RCom Loan as Fraud Amidst Reliance Group Revival Efforts

Anil Ambani named in report to RBI as RCom debt woes resurface; Sprouts News Investigation Team (SIT) tracks corporate fallout and comeback narrative

Sprouts News Investigation Team (SIT) investigates Anil Ambani-led RCom’s collapse, SBI’s fraud classification, and Reliance Group’s ongoing turnaround via clean energy and defence bets.

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RCom Loan Labelled ‘Fraud’ by SBI in Major Blow to Anil Ambani

In a major setback to Anil Ambani’s troubled telecom legacy, the State Bank of India (SBI) has officially flagged Reliance Communications’ (RCom) loan account as “fraud.” The bank has further reported the name of Anil Dhirajlal Ambani, former director of the company, to the Reserve Bank of India (RBI) under regulatory norms. This development relates to exposures stemming from August 2016 and marks another chapter in RCom’s protracted financial decline.

RCom confirmed SBI’s move in a stock exchange filing. The company stated that since it has been under the Corporate Insolvency Resolution Process (CIRP) since 2019, any liabilities or loans predating the insolvency must be resolved through the approved resolution framework.

The classification of fraud escalates legal and regulatory scrutiny of the once high-flying telecom major. Sprouts News Investigation Team (SIT) has learned that the SBI’s decision comes after a forensic audit revealed significant lapses in fund usage, possibly pointing toward diversion or misuse.

From Telecom Titan to Insolvency: RCom’s Decline

Reliance Communications was once India’s second-largest telecom operator, riding high on capital strength, network expansion, and a disruptive pricing strategy. It emerged from the 2005 demerger of Reliance Industries Ltd., in the aftermath of the Ambani family split. Anil Ambani took control of Reliance Infocomm, later rebranded as RCom, and made headlines with the “Monsoon Hungama” offer that brought mobile services within reach of India’s lower-income population.

The company adopted CDMA technology, which allowed for better spectral efficiency and early rollout of data services. This differentiated technical strategy helped it build one of the widest telecom infrastructures in India. The 2006 IPO was a historic event—oversubscribed 73 times, raising over ₹5,000 crore—reflecting the euphoria surrounding RCom’s future.

However, the dream soon unraveled. The telecom sector’s evolution, marked by intense price wars (especially after Jio’s entry), high spectrum costs, and debt-fueled expansion, devastated several operators. RCom, burdened with ₹40,400 crore ($4.71 billion) in debt as of March 2025, filed for bankruptcy in 2019. Alongside poor management decisions, the switch to 4G technologies and competitive pricing strategies by rivals squeezed its margins and subscriber base.

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Reliance Group Eyes Revival Through Energy and Defence

While RCom remains mired in insolvency, the broader Anil Ambani-led Reliance Group is attempting a resurgence. Reliance Infrastructure and Reliance Power—once key pillars of the group—have shown signs of recovery. The group has made strategic bets in clean energy and defence manufacturing, winning new government tenders and forging public-private partnerships.

Investor sentiment toward these group companies has seen a cautious uptick. Market watchers note that if regulatory issues tied to RCom do not spill over, other Reliance Group entities may manage a turnaround. However, Sprouts News Investigation Team (SIT) sources caution that pending litigation, asset monetisation delays, and promoter credibility remain challenges.

In parallel, Anil Ambani himself has remained under financial and legal scrutiny. He was previously summoned by courts in India and the UK over personal guarantees and exposure to group-level debt. The latest SBI action adds to the pressure on both the individual and the conglomerate.

Regulatory Watch: Fraud Tag Adds Complexity to Insolvency Resolution

By flagging RCom’s loan as “fraud,” SBI’s action will complicate ongoing insolvency resolution proceedings. Under RBI’s Master Directions on Frauds, such classification necessitates criminal complaint filings with law enforcement agencies, typically followed by a detailed probe by the Central Bureau of Investigation (CBI) or Enforcement Directorate (ED). The Insolvency and Bankruptcy Code (IBC) mandates that resolution applicants must not be connected to fraudulent promoters—potentially excluding Anil Ambani from any future role in RCom’s revival.

Legal experts contacted by Sprouts News Investigation Team (SIT) confirm that fraud labelling during CIRP is rare but increasing as banks come under pressure to clean up legacy NPAs. This action could lead to further probes into how RCom deployed funds, its governance failures, and whether group-level cross-financing contributed to its collapse.