RCOM Subsidiary Reliance Telecom Classified as Fraud by SBI; Faces RBI Reporting
Reliance Telecom Limited (RTL), a subsidiary of Reliance Communications Limited (RCOM), has had its loan account classified as "fraud" by the State Bank of India (SBI). RTL will be reported to the RBI. Both RCOM and RTL are under corporate insolvency resolution. RCOM cites IBC protections against pre-CIRP liabilities.
The classification of fraud by SBI and the subsequent reporting to RBI can severely impact the reputation and ongoing resolution process of both RTL and RCOM, potentially affecting creditor confidence and the outcome of the insolvency proceedings.
The classification of a loan account as 'fraud' by a major bank is a significant negative development, indicating serious financial irregularities and potential legal repercussions.
Reliance Communications Limited (RCOM) has disclosed that its subsidiary, Reliance Telecom Limited (RTL), has received a letter from the State Bank of India (SBI) stating that RTL's loan account has been classified as "fraud" by SBI's fraud identification committee. Consequently, RTL's name will be reported to the Reserve Bank of India (RBI).
This classification is based on a forensic audit report and the SBI's subsequent review. The report details several alleged instances of fraud, including the utilization of bank loans for purposes other than those specified in sanction letters, such as repayment of other bank loans and payments to connected parties. It also points to potential misutilization of funds, circuitous routing of funds through group entities, and the creation or write-off of fictitious debtors.
RTL and RCOM are currently undergoing corporate insolvency resolution processes (CIRP). The company's disclosure highlights that the credit facilities in question pertain to the period prior to RTL's CIRP. RCOM emphasizes that under the Insolvency and Bankruptcy Code, 2016 (IBC), both RCOM and RTL are protected from legal proceedings and potential liabilities for offenses committed prior to the commencement of their CIRP, especially upon the approval of their respective resolution plans by the National Company Law Tribunal (NCLT).
Legal advice is being sought regarding the way forward. The SBI's letter, dated March 11, 2026, was received by RTL on March 13, 2026. The fraud classification by SBI was re-initiated following a Supreme Court judgment, after an initial classification in 2020 was reversed. The Resolution Professional for RTL had previously responded to show cause notices, citing protections under the IBC.
What to do with a filing like this
Reliance Communications Limited filed this with the NSE as a statutory disclosure, categorised under fraud/defaults disclosure. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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See the model portfoliosA plain-language summary of a public exchange filing by Reliance Communications Limited. Read the original for the full detail.