State Bank of India (SBI) has classified the loan account of Reliance Telecom Limited (RTL), a subsidiary of Reliance Communications, as fraud following findings from a forensic audit conducted by BDO India LLP. The audit revealed that ₹221.94 crore out of ₹375 crore in total loans obtained from banks was diverted to connected parties in violation of sanctioned loan terms and covenants. After issuing show cause notices and reviewing evidence, SBI’s Fraud Identification Committee finalized the classification on February 21, 2026, and plans to report the account to the Reserve Bank of India under regulatory fraud reporting guidelines. RTL had argued that ongoing insolvency proceedings under the Insolvency and Bankruptcy Code provide protection, but SBI determined that fraud classification is a regulatory action independent of insolvency resolution, while both Reliance Communications and RTL continue to undergo corporate insolvency proceedings awaiting approval of resolution plans by the National Company Law Tribunal.

References

• State Bank of India
• Reliance Communications
• Reserve Bank of India
• Insolvency and Bankruptcy Code
• National Company Law Tribunal
• Forensic accounting
• BDO Global

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