Mumbai: In a sharp rebuttal to the recent move by the State Bank of India (SBI), industrialist Anil Ambani has alleged that the ‘fraud’ classification of Reliance Communications Ltd (RCom) loan account was done without due process, personal hearing, or transparency. In a strongly worded letter issued through his legal counsel, Ambani claimed that the classification was done ex parte—that is, without giving him an opportunity to present his side, and in violation of Supreme Court, Bombay High Court rulings, and RBI norms.
Background: Fraud Classification
On 23 June 2025, SBI informed RCom—currently undergoing liquidation proceedings—that the bank had officially classified its loan account as “fraud” and had also decided to report the name of Anil Ambani, a former director of RCom, to the Reserve Bank of India (RBI).
This follows findings by SBI’s Fraud Identification Committee (FIC), which allegedly uncovered irregularities in the utilization of funds disbursed to RCom and its subsidiaries.
According to filings on the stock exchange and a PTI report, RCom and its arms had collectively availed loans amounting to ₹31,580 crore from a consortium of banks, of which SBI is the lead lender.
Ambani’s Response: No Basis, No Hearing
Anil Ambani, contesting the move, issued a legal notice to SBI, stating that:
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No specific basis or evidence was provided for the classification.
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Multiple requests for explanation and personal hearing were ignored by the bank.
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The decision is contrary to RBI’s Master Directions on fraud classification and investigative procedure.
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It undermines legal precedents set by the Supreme Court and Bombay High Court, which emphasize the requirement of audi alteram partem—the principle of hearing both sides.
Ambani further claimed that SBI’s unilateral move causes serious reputational damage, especially considering RCom is under corporate insolvency and liquidation proceedings under the supervision of NCLT (National Company Law Tribunal).
Industry and Legal Implications
This development could set a precedent in the treatment of insolvency cases involving large corporate defaulters, especially concerning personal liabilities of former directors. Legal experts note that while the RBI permits banks to tag loans as fraudulent, due process—including personal hearings—remains a mandatory safeguard.
Financial and legal observers are watching closely whether Anil Ambani will challenge SBI’s move in court, as it could potentially lead to a landmark judgment clarifying the rights of corporate promoters in fraud proceedings under insolvency.
Conclusion
The ongoing tussle between SBI and Anil Ambani over the “fraud” designation of RCom’s ₹31,580 crore loan highlights broader questions around transparency, accountability, and due process in India’s financial regulatory framework. As the matter gains traction, it may serve as a litmus test for the balance between lender discretion and borrower rights in an evolving corporate insolvency landscape.
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