Anil Ambani gets BIG relief as Rs 102000 crore bank withdraws 'fraud' tag on his loan account, not SBI, PNB

Anil Ambani, Reliance Group chairman, has gotten big relief as the Canara Bank has withdrawn its order classifying as 'fraudulent' the loan account of a firm linked to the industrialist. The bank, whose market cap is Rs 1.02 lakh crore, informed the update to the Bombay High Court on Thursday. After the bank’s disclosure, a bench of Justices Revati Mohite Dere and Neela Gokhale disposed of the petition filed by Ambani challenging the bank’s order, saying nothing survives in it. The bench said the withdrawal order shall be informed to the Reserve Bank of India.

Fraud tag to Reliance Communications' loan account

The loan account is concerned with Ambani’s firm Reliance Communications, which is undergoing insolvency proceedings. On November 8, 2024, the bank classified the loan account as “fraud” for reasons including that a Rs 1,050 crore loan extended in 2017 was 'routed' to a group company to pay other liabilities to connected or related parties. The order was based on the RBI’s master circular related to fraud accounts that laid guidelines for such declarations.

In February this year, the HC stayed the order pending hearing of the plea. At the time, the HC had questioned whether the RBI would take action against banks that have repeatedly defied its master circular and the Supreme Court’s ruling, which mandates that borrowers must be given a hearing before their accounts are declared "fraudulent".

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Anil Ambani challenges Canara Bank’s order

Ambani had challenged the Canara Bank’s order, arguing that he was not given a hearing before his loan account was classified as fraudulent. The industrialist had contended that the fraud classification was issued on November 8, 2024, but was only communicated to him on December 25, after the HC had already stayed a similar classification in a related matter. Ambani further claimed that Canara Bank had informed the RBI about the fraud classification as early as September 6, 2024, even before officially issuing the order.

(With inputs from PTI)