Union Bank of India Classifies Reliance Communications Loan Accounts as Fraud

Union Bank of India has classified the loan accounts of Reliance Communications Limited (RCOM) and its subsidiary, Reliance Telecom Limited (RTL), as fraud. This decision follows a forensic audit and an internal review by the bank's Fraud Monitoring Group. 

Details of the Fraud Classification 

On December 9, 2025, Reliance Communications informed the stock exchanges about Union Bank's decision. The bank's order, dated December 4, 2025, records the sanction of consortium facilities amounting to ₹1,550 crore for RCOM, which were classified as non-performing assets (NPA) on June 2, 2017, with an outstanding amount of ₹1,324.86 crore.  

A forensic audit conducted by BDO India LLP revealed elements of fraud, leading to the classification of RCOM's accounts as fraud. 

Similarly, RTL's loan accounts, sanctioned at ₹40 crore, were also classified as NPA on June 2, 2017, with ₹35.76 crore outstanding. The same forensic report was used to determine the classification of RTL's accounts as fraud. 

Forensic Audit Findings 

The forensic audit highlighted several issues, including alleged misutilisation of funds, routing of bank loans to related parties, and the use of loans to repay other bank facilities. There were also significant inter-company deposits and transactions involving group entities.  

The audit noted complex schemes involving preference shares and intra-group transfers, which the bank characterised as resulting in losses and potential siphoning of funds. 

Read More: CBI Charges Anil Ambani's Son and Reliance Home Finance in ₹228 Crore Bank Fraud Case! 

Legal and Regulatory Implications 

Both RCOM and RTL are under the Corporate Insolvency Resolution Process (CIRP) as per the Insolvency and Bankruptcy Code. Their resolution plans have been approved by creditors and are pending approval from the National Company Law Tribunal (NCLT).  

The companies are relying on protections under Sections 14, 32A, and 238 of the Code, and have filed avoidance applications for certain transactions while seeking legal advice. 

Reliance Communications Share Price Performance 

As of December 10, 2025, at 9:19 AM, Reliance Communications share price on NSE was trading at ₹1.19 up by 1.71% from the previous closing price. 

Conclusion 

The classification of loans as fraud by Union Bank of India marks a significant development in the financial scrutiny of Reliance Communications and its subsidiary. The forensic audit's findings have led to regulatory actions, with the matter being reported to the Reserve Bank of India and law enforcement agencies. 

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