BoB has loans to RCom worth ₹1,656 crore outstanding as on August 28, against a sanctioned limit of ₹2,462 cror

Bank of Baroda has classified the loan account of Reliance Communications and its former promoter and director Anil Ambani as fraud, becoming the third lender to do so after State Bank of India and Bank of India.

In a letter to RCom, which the company made public in an exchange filing, the state-owned lender said it had found several irregularities in a forensic audit conducted by it and they were established.

BoB has loans to RCom worth ₹1,656 crore outstanding as on August 28, against a sanctioned limit of ₹2,462 crore. The telecom operator’s loan account was classified as non-performing in June 2017.

Referring to the irregularities, the bank flagged systemic misutilisation of borrowed funds contrary to the purpose for which they were sanctioned, diversion of loans through unauthorised channels and intermediaries, undertaking related party transactions without proper authorisation or commercial rationale, unexplained and improper utilisation of inter-corporate deposits, deliberate recycling of funds to create artificial transactional layers, irregular joint venture entries that lacked commercial substance, and improper cross-transactions between the company and its key subsidiaries.

It pointed out each irregularity had been corroborated by specific transactional details thorough fund flow analysis, banking records and supporting documentation contained in the Forensic Audit Report.

It also said the explanations and justifications by the company were general, evasive and procedural, and failed to address the “specific factual determinations and transactional evidence documented in the FAR”.

While passing the order the bank said it would be reporting the classification to the Reserve Bank of India.

Response

Responding to the fraud classification, RCom said the credit facilities that were referred to in BoB’s letter pertained to a period prior to the company being admitted to insolvency. A resolution plan has been approved and is awaiting approval of the National Company Law Tribunal.

It also said it was seeking legal advice on the matter and the way forward.

Published on September 5, 2025