RCOM Receives Notice from Central Bank of India Regarding Fraud Declaration

* Reliance Communications Limited (RCOM) received a notice from Central Bank of India on September 2, 2025, regarding the declaration of RCOM's account as fraud, based on RBI Master Directions on Frauds. * The bank is calling upon RCOM to show cause as to why its account should not be declared as fraud and reported to the RBI, based on a forensic audit report. * A forensic audit of Reliance Communications Limited (RCOM), Reliance Infratel Limited (RITL) and Reliance Telecom Limited (RTL) was conducted for the period from 1 April 2013 till 31 March 2017. * RCOM, RITL and RTL cumulatively received ₹31,580 crore from banks, out of which ₹13,667.73 crore (44%) was utilized for repayment of loans and other obligations to Banks/Financial Institutions (FI) and ₹12,692.31 crore (41%) was utilized to pay to connected parties. * ₹6,265.85 crore obtained from banks through loans were utilised for repayment of other bank loans and ₹5,501.56 crore obtained from banks through loans were utilised for payment made to related and connected parties. * Loan funds were obtained by RITL and then moved from RITL to RCOM through RCIL. The loans were then used by RCOM to pay its liabilities or transferred to related parties. Total ₹1,976 crore was obtained by RITL and out of these ₹1,783.65 crore was majorly utilised by RCOM for repayment to other banks and as transfers to connected parties. * RCOM has availed loan facility from Bank of Baroda through sanction letter of 15 December 2016. Total amount of loan sanctioned was ₹228.17 crore (Term loan I) and ₹1,000 crore Term Loan II (Corporate Loan). Amount disbursed by BOB is for meeting capital expenditure of RCOM as per the sanction letter, but the disbursement of ₹469.45 crore was paid to RCIL and RTSL for non-capital expenditures as per the documents made available. * RCOM, RITL and RTL have transferred the bank loan funds internally among themselves. RCOM has transferred ₹783.11 crore to RTL and ₹1,435.24 crore to RITL from loans obtained from Banks. * ₹2,586.95 crore and ₹1,087.90 crore of the loans received were invested in Fixed Deposits and Mutual Funds respectively , and these investments were liquidated immediately and further utilised for payments to related and non-related parties. * RITL has discounted bills worth ₹200 crore and transferred the proceeds to RCIL i.e. short-term loan was used to pay related party loans and simultaneously, new bills were discounted to repay the original facility of the previous month. * RITL has discounted bills of RCOM worth ₹8,514.70 crore and of RTL worth ₹1,041.42 crore and these funds were majorly used for making payments to connected parties. * 8,66,66,667 shares were allotted to Telecom Infrastructure Finance Private Limited on Conversion of Warrants on 20 January 2015 for which ₹1,300 crore were received as on that date. It was utilized for investment of ₹769.99 crore in mutual funds and payment to banks of ₹527.18 crore. * lCD obtained during the Review Period was ₹41,863.32 crore, out of which ₹28,421.61 crore was traced. Out of ₹28,421.61 crore, ₹23,128.45 crore was utilized for payment to connected parties and ₹3,214.74 was utilized for repaying bank loans. * In 2015-16, Netizen had received a capital advance of ₹5,525 crore from RCOM. In 2017-18 Netizen acquired two assets (one tangible worth ₹3,041.24 crore and a receivable worth ₹3,042 crore) from MPNL one of which was immediately transferred to RCIL. On transfer of this asset, RCOM wrote-off the capital advance it had given to Netizen against receivable balance from RCIL. In addition, multiple other accounts have been assigned to Netizen to reduce its receivable balance by RCOM and RTL. * Collections received by RTL from RWSL amounting to ₹1,110.50 crore (660.50 + 450.00 respectively) were received from RCOM (as !CD/against outstanding), through a series of transactions. * As on 1 April 2013, ₹1,347.70 crore was receivable from RTL in the books of RITL. RTL issued preference shares worth ₹1,347.70 crore to RITL in satisfaction of the receivable amount on 31 March 2014. RITL sold the above preference shares to RCTNL on same date i.e. 31 March 2014 for ₹260 crore, thereby incurring a loss of JNR 1,087.70 crore. * RITL has given ICDs to RRL worth ₹1,954.91 crore (net) during the Review Period, out of which ₹393 crore were majorly out of funds disbursed from IDFC term loan, ₹835 crore from RCIL, ₹300 crore from RCOM. In repayment of the above ICDs (along with interest amounting to ₹109 crore) RRL issued Preference Shares worth ₹2,000 crore to RITL on 31 March 2017. RITL sold the abovementioned Preference Shares to Reliance Bhutan Limited (RBL) for ₹200 crore on the same date i.e. 31 March 2017, for which amount was received from RBL on 20 February 2017 (in advance) Thus, an amount of ₹2,000 crore was settled for ₹200 crore, by incurring a loss of ₹1,800 crore in the books of RITL on sale of preference shares of RRL to RBL. * Closing Balance of Charges as on 31 March 2017 amounted to INR 49, 111.47 crores, however, assets of these companies amounted to INR 26,163.43 crores.