Bombay High Court Upholds SBI’s Fraud Tag on Anil Ambani’s Loan Account

Mumbai, Oct 2025: In a major setback to industrialist Anil Ambani, the Bombay High Court on Friday dismissed his plea challenging the State Bank of India’s (SBI) decision to classify his loan account as “fraudulent.”

A division bench of Justices Revati Mohite Dere and Neela Gokhale rejected Ambani’s claims of procedural unfairness and arbitrariness, ruling that SBI had acted in line with the Reserve Bank of India’s (RBI) Master Directions on Fraud Classification issued in July 2024.

SBI had, in June 2025, tagged the loan accounts of Reliance Communications (RCom) and its promoter Anil Ambani as “fraud” after detecting diversion of funds, breach of loan covenants, and related-party transactions. The bank also referred the matter to the Central Bureau of Investigation (CBI) for further action.

Ambani had contested the decision, arguing that he was merely a non-executive director of RCom and had been unfairly singled out. He further alleged that the bank did not provide him with sufficient opportunity to present his defence. The High Court, however, found no merit in these arguments.

Earlier this month, Bank of Baroda also declared the loan accounts of RCom and Ambani as fraudulent in an exchange filing. The classification pertained to borrowings taken before RCom entered the corporate insolvency resolution process (CIRP).

Once considered a telecom giant, RCom slipped into deep financial distress, eventually entering insolvency proceedings under the Insolvency and Bankruptcy Code (IBC) in 2016. The company has since maintained that the loans in question relate to the period prior to the insolvency process and must therefore be addressed either under a resolution plan or through liquidation.

RCom is currently under the management of resolution professional Anish Niranjan Nanavaty, while Ambani no longer holds any directorial role in the company.

The court’s decision marks a critical moment in the long-running financial troubles surrounding Anil Ambani and RCom, underlining the judiciary’s support for banks acting in accordance with RBI’s directives in cases of suspected fraud.