The Bombay High Court has dismissed a petition filed by Anil Ambani challenging the State Bank of India's (SBI) decision to classify Reliance Communications Ltd.'s (RCom) loan account as "fraud". The order, issued on June 13, 2025, designated RCom's account as fraudulent and directed that Ambani, its erstwhile non-executive director, be reported to the Reserve Bank of India (RBI) under fraud risk management guidelines.

Ambani approached the High Court in July, alleging violation of principles of natural justice, arguing that he was not granted a personal hearing and denied key documents. His legal team argued that SBI furnished only an incomplete report in response to its December 2023 show-cause notice, and that critical documents were provided belatedly.

SBI's counsel, along with the RBI's counsel, opposed the plea, stressing that repeated notices were served on Ambani but no satisfactory explanation was offered. The High Court bench observed that the petition lacked merit and dismissed it. Ambani's spokesperson stated that they are awaiting the order and will evaluate the next course of action.

SBI had initially tagged Anil Ambani and Reliance Communications' loan account as 'fraud' in November 2020. The bank filed a complaint with the CBI in January 2021, but the agency returned it after a Delhi High Court order directed that the status quo be maintained.

Under Indian banking regulations, once an account is classified as fraudulent, it must be referred to enforcement agencies for criminal proceedings. The borrower is also prohibited from accessing fresh credit from banks and other regulated financial institutions.

The Supreme Court ruled in March 2023 that lenders must give borrowers a chance to be heard before classifying them as fraudulent. Following this, SBI withdrew its earlier 'fraud' designation in September 2023. In July 2024, the RBI issued a circular outlining the framework for fraud classification. Acting in line with the new rules, SBI revived the process and again declared Ambani and RCom's account as 'fraud'.

SBI's classification order dated June 13, 2025, named the borrower as RCom and its account as "fraud". The order stated that Anil Ambani's name shall be reported to the Reserve Bank of India (RBI), based on guidelines on fraud risk management.

In a related matter, Canara Bank earlier withdrew its order classifying RCom's account as "fraudulent" after Ambani filed a similar petition.

SBI's total exposure to RCom includes a fund-based principal outstanding of nearly ₹2,228 crore as of August 26, 2016, along with accrued interest and expenses, in addition to non-fund-based guarantees worth around ₹787 crore.

RCom is currently undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016.

In August 2025, Bank of India also classified the loan account of insolvent Reliance Communications as fraudulent and named Anil Ambani, citing alleged fund diversion in 2016.