Canara Bank erases 'fraud' tag from Anil Ambani's RCom loan

Public sector lender Canara Bank Thursday informed the Bombay High Court that it has withdrawn its order of classifying the Anil Ambani-promoted Reliance Communications loan account as 'fraudulent'.

The division bench of Justice Revati Mohite Dere and Justice Neela Gokhale, after hearing the lender's views on the subject, disposed of the case. The detailed order was not uploaded until the publication of this report.

Separately, the State Bank of India (SBI) has also classified the loan account of Reliance Communications as 'fraud.'


Anil Ambani has also challenged that order in the Bombay High Court.

Nishith Dhruva, managing partner of law firm MDP Legal, appearing for the Canara Bank, informed the court Thursday that the lender has decided to withdraw the fraud classification of Anil Ambani in the Reliance Communications' loan matter.

The development comes in a writ petition filed by Anil Ambani against the lender, challenging its order of November 8 last year, which classified the loan account as 'fraud'.

Canara Bank's order came in the wake of the Reserve Bank of India (RBI) master circular that permitted banks to declare any account as fraudulent and had also laid down guidelines for the purpose.

Earlier in February, the court stayed a Canara Bank order that classified industrialist Anil Ambani's loan account as fraudulent. While granting interim, the court sought to know from the RBI what actions it proposed to take against the lenders for issuing orders declaring loan accounts as fraudulent without hearing the parties or borrowers, defying the master circular and Supreme Court rulings.

The RBI decision on fraud risk management in banks was taken under the Reserve Bank of India (Frauds Classification and Reporting by Commercial Banks and Select FIs) Directions of 2016. The RBI had also directed the banks to devise their own policies.

Senior Counsel Gaurav Joshi, appearing for Ambani, during earlier hearings had argued that without observing the principles of natural justice and without hearing the petitioner (Anil Ambani), the order dated November 8, 2024 was passed mechanically and the same was communicated to the petitioner after more than a month i.e. on December 25, 2024, of the order being passed.

As per the latest available data with the Insolvency & Bankruptcy Board of India (IBBI), Reliance Communications has admitted liabilities of about ₹94,105 crore. The company is currently undergoing the Corporate Insolvency Resolution Process (CIRP).