Reliance Communications loan account classified as fraud by Central Bank

Reliance Communications Limited (RCOM) announced on October 8, 2025, that the Central Bank of India classified a loan account as 'fraud' effective September 29, 2025. This classification, detailed in an October 4, 2025, letter from the bank's Stressed Asset Management Branch, was reported to the Reserve Bank of India on September 30, 2025. The total amount involved in this borrowal fraud declaration is INR 357.68 Crore.

The fraud declaration follows a forensic audit by BDO India LLP, which submitted a report on October 15, 2020, highlighting "grave anomalies" in the account's conduct. The audit indicated potential diversion of funds from various credit facilities, including a Term Loan of INR 280.00 Crore for Reliance Communication Limited, Term Loan of INR 20.00 Crore for Reliance Telecom Limited, and Performance Bank Guarantee of INR 100.00 Crore for Reliance Telecom Limited, for an aggregate amount of INR 400.00 Crore. Irregularities were observed in the utilization of loan amounts, with auditors pointing out that funds were used for purposes inconsistent with sanction terms, including payments to related and non-related parties and investments.

RCOM is currently undergoing a corporate insolvency resolution process (CIRP), with a resolution plan awaiting approval from the National Company Law Tribunal (NCLT). The company stated that credit facilities/loans predate the CIRP and are subject to resolution as part of the plan or liquidation.