Mumbai police register FIR on Axis Bank complaint against RCFL, ADAG promoters

Mumbai: The Mumbai Police have filed a case based on a Axis Bank’s complaint against Reliance Commercial Finance Limited (RCFL), Reliance Infrastructure Ltd, Reliance Power Ltd and promoters of the Anil Dhirubhai Ambani Group (ADAG) alleging financial irregularities and diversion of funds.

The had initiated a preliminary enquiry (PE) into the matter, which has now been converted into a formal FIR. The case has been registered under provisions relating to cheating, criminal breach of trust, falsification of accounts and criminal conspiracy under the erstwhile IPC.



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While the bank has quantified the amount involved at ₹38.95 crore, representing the principal sacrifice under the resolution plan implemented for RCFL, the police are probing transactions worth over ₹1,800 crore flagged in a forensic audit conducted by Grant Thornton India LLP.

Axis Bank and ADAG could not be reached immediately for comment.

The audit firm was appointed in 2019 by a consortium of lenders led by Bank of Baroda to examine the financial transactions of RCFL.

According to the complaint, the forensic audit identified several irregularities including diversion of funds, roundtripping and layering of transactions, non-compliance with loan covenants and possible evergreening of loans.

Investigators have alleged that loans extended by RCFL were routed through multiple intermediary entities and eventually channelled to companies linked to ADAG. The complaint states that funds were diverted through structured transactions involving entities described as potential indirectly linked entities (PILE).

The forensic audit found that about ₹1,800 crore of loans were routed through such transactions, including funds mobilised through mutual funds and debentures. Specifically, ₹344.89 crore was invested in mutual funds and ₹200.38 crore was raised through debentures, the complaint said.

The audit observed that certain loans extended by RCFL were reflected in its books as standard and regularly serviced facilities.

The report also alleged that funds raised by RCFL were diverted through a network of intermediary entities. According to the complaint, the transactions were structured in a manner that enabled the funds to be siphoned off through multiple layers before being routed back through other financial arrangements.


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Sources said the bank in its complaint had alleged that RCFL had availed credit facilities from 24 lenders under a multiple banking arrangement, with Bank of Baroda acting as the lead bank under an Inter-Creditor Agreement (ICA) signed on July 6, 2019.

The audit report stated that ₹4,766.62 crore of end utilisation was traced, of which about 39% (₹1,867.89 crore) was used for servicing debt of PILE and group companies. Around 25% (₹1,199.29 crore) of transactions were identified as potential circular transactions routed back to RCFL, including ₹557.37 crore categorised as pass-through transactions where the end use could not be mapped.

Axis Bank classified the RCFL account as a non-performing asset (NPA) in January 2020. Subsequently, 11 lenders, including Axis Bank, classified the account as fraud during 2020–21.

Multiple agencies, including the Enforcement Directorate and Central Bureau of Investigation, are already probing companies linked to ADAG.