SBI Flags Reliance Telecom Loan as Fraud Amid Ongoing Insolvency Process

Reliance Communications Limited ( (IN:RCOM) ) has issued an update.

Reliance Communications Limited has disclosed that its subsidiary, Reliance Telecom Limited, has had its loan account classified as fraudulent by State Bank of India following a decision by the bank’s fraud identification committee. SBI intends to report RTL’s name to the Reserve Bank of India in line with regulatory requirements, highlighting legacy credit issues that predate the insolvency process and intensifying scrutiny over the group’s past financing arrangements.

The company stated that both Reliance Communications and Reliance Telecom are already in corporate insolvency resolution, and that the affected credit facilities will be dealt with through the approved resolution plans or liquidation as required under the insolvency code. It emphasized that ongoing moratorium protections and specific provisions of the Code shield the entities from new proceedings during CIRP and may limit post-resolution liabilities, while several avoidance applications related to the questioned transactions are pending before the National Company Law Tribunal.

More about Reliance Communications Limited

Reliance Communications Limited is an Indian telecommunications company that has been undergoing a corporate insolvency resolution process under the Insolvency and Bankruptcy Code since 2019. Its subsidiary, Reliance Telecom Limited, operates in the same sector and is also under insolvency proceedings, with resolution plans for both entities awaiting approval from the National Company Law Tribunal in Mumbai.

Average Trading Volume: 802,234

Technical Sentiment Signal: Sell

Current Market Cap: 2.82B INR

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