Bank of India Declares RCom Loan Fraud, Names Anil Ambani

New Delhi: Bank of India (BOI) has classified the loan account of Reliance Communications (RCom) as fraudulent.

The public sector bank has joined the State Bank of India (SBI) in raising red flags over alleged fund diversion by the telecom firm and its former director, Anil Ambani.

The BOI’s letter, dated August 8 and disclosed by RCom on August 22, also names Manjari Ashok Kacker, another erstwhile director, in the fraud classification.

Bank of India had sanctioned a Rs 700 crore loan to RCom in August 2016 for operational and capital expenses. However, half of the disbursed amount was allegedly diverted into a fixed deposit, an act that violated the loan’s terms. The account turned non-performing on June 30, 2017, with an outstanding of Rs 724.78 crore.

The bank’s action follows SBI’s earlier complaint, which led to a Central Bureau of Investigation (CBI) probe and searches at Ambani’s residence.

RCom’s subsidiary, Reliance Telecom Ltd, has also been flagged by Bank of India for similar violations.

Under banking laws, fraudulent accounts must be referred for criminal investigation, and borrowers are barred from fresh financing for five years. Anil Ambani has denied all allegations and vowed to defend himself.