Bank of India Classifies Loan Account of Reliance Communications as ‘Fraud’

Bank of India has decided to classify the loan accounts of Reliance Communications Limited, Shri Anil Dhirajlal Ambani (promoter and erstwhile director of the Company), and Smt. Manjari Ashok Kacker (erstwhile director of the Company), as ‘Fraud‘.

Reliance Telecom Limited (RTL), a subsidiary of the Company, has also received a Letter from Bank of India inter stating that Bank of India has decided to classify the loan accounts of RTL (subsidiary of the Company), Smt. Grace Thomas (erstwhile director of RTL and present director of the Company) and certain other persons (as identified in the RTL Letter), as ‘Fraud’.

A Term Loan of Rs.700 crore was sanctioned by Bank of India. Rs.724.78 Crores was outstanding as on 07/08/2025. The loan was sanctioned to meet temporary mismatch arising due to investments made in acquisition of 3G spectrum and related capital expenditure. The loan was sanctioned without any guarantee.

The account of Borrower turned NPA on 30.06.2017 with outstanding of Rs 724.78 Crores. The Bank has been following up with the Borrowers and Guarantors for repayment of dues, however, they have failed and neglected to make repayment of the dues.

Subsequent to the account turning NPA, Bank had conducted Forensic Audit through M/s BDO India LLP. The findings of the Forensic Audit was placed before the competent authority. The competent authority after perusal of the Forensic Audit has felt that there are suspected fraudulent connotations in view of the following observations/findings/conclusion of the Forensic Audit:

• Bank of India disbursed INR 350.00 Crores vide letter of 3 October 2016 (as per review letter) to RCOM for “ongoing Capital exp, operational expenditure, repayment of existing liabilities other than related party / shareholder loans”.
• Diversion of Loans: INR 350.00 Crores was invested in fixed deposit.
• BOI loan raised on 27.03.2015 amounting to Rs. 350 Cr, for paying spectrum fees. Loan amount was kept in MF account till 07.04.2015.
• SCB loan of Rs. 310.00 Cr was raised on 30.03.2015. FD amounting to Rs. 632.50 Cr (BOI Rs. 350 cr + SCB rs 310 Cr) was made on 07.04.2015. Against said FD; RCOM availed an equivalent loan from BOI of Rs. 632.50 Cr for making Spectrum fees payment to DOT Govt of India.
• FD Liquidated on 11.06.2015 and repaid BOl loan of Rs. 632.50 Cr. The entire BOI loan was used for making operational expenditure payment.
• As per sanction letter, utilization of loan amount for investment in fixed deposits was not permitted and hence, itis considered as non-compliance with sanction terms of the loan.

Borrower requested that the company is undergoing Corporate Insolvency Resolution Process (CIRP) and thus the account should not be classified as Fraud.