Bank Of Baroda Declares Rcom, Anil Ambani Loans As Fraud: Why Tag Was Applied

In yet another blow to the debt-hit Reliance Communications (RCom), Bank of Baroda (BoB) has declared the company's loan accounts-and those linked to its former director Anil Ambani-as“fraud.” The disclosure, made in a stock exchange filing, adds fresh trouble for the once-prominent telecom firm already battling insolvency.

Why Were the Loans Tagged as Fraud?

According to banking officials, BoB's decision comes after finding red flags in loans taken by RCom before it entered insolvency. These included signs of fund diversion, violations of loan terms, and possible misreporting of financials.

The move is also in line with RBI's fraud risk management rules, which require banks to mark accounts as fraud if wilful default or serious irregularities are detected.

RCom Pushes Back Under Insolvency Shield

RCom, which has been under the Corporate Insolvency Resolution Process (CIRP) since 2019, has pushed back. The company said the loans flagged as fraudulent date back to before insolvency proceedings began, and therefore must be dealt with through a court-approved resolution plan or liquidation-not fresh legal action.

Under insolvency law, companies in CIRP are protected from new lawsuits or recovery proceedings, a safeguard RCom insists still applies.

Where Does Anil Ambani Fit In?

Although Anil Ambani is no longer on RCom's board, his name figures in the fraud tag because the loans were taken during his tenure. Investigators allege that some of his group firms diverted funds and defaulted on repayments.

The Enforcement Directorate (ED) is already probing loans worth nearly Rs 17,000 crore linked to RCom, Reliance Housing Finance, and Reliance Commercial Finance. Several banks, including BoB, have been asked to share details.

Other Banks Already Took Action

BoB's decision is not isolated. In June 2025, SBI had already marked RCom's loans as fraud, followed by Bank of India on August 24, which accused the company and Ambani of fund diversion and breaching loan covenants.

What This Means for RCom

For RCom, the fraud tag doesn't immediately change its insolvency process but does increase the spotlight on its financial past. Experts say it could also influence regulatory bodies as they assess its resolution plan, currently awaiting approval from the National Company Law Tribunal (NCLT).

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