The Bombay High Court on Friday dismissed a petition filed by industrialist Anil Ambani challenging the State Bank of India’s (SBI) decision classifying his and Reliance Communications’ accounts as fraud, as per a report by PTI.

Court finds no merit in plea

According to PTI, a bench of Justices Revati Mohite Dere and Neela Gokhale said there was no merit in the plea.

The SBI had last year classified the accounts as fraud, alleging misappropriation of funds by entering into transactions that violated the terms of loans extended by it. The case alleges that it caused a loss of over ₹2,929 crore to the State Bank of India.

A spokesperson for Mr. Anil D. Ambani stated, “We are awaiting the order. Once we have reviewed it, we will evaluate the next course of action, as legally advised.”

Apart from SBI, Bank of India (BOI) has also classified the loan accounts of promoter Anil Ambani, Reliance Communications (RComm) and Reliance Telecom under the same category.

SBI files complaint with CBI

Ambani moved the HC, arguing that the bank had not followed the principles of natural justice as it did not grant him a hearing. Certain documents, based on which the classification orders were passed, were not provided to him initially, and furnished only after six months, the petition claimed.

The bank this year lodged a complaint with the Central Bureau of Investigation (CBI), which searched premises linked to Reliance Communications and Ambani’s residence.The CBI said it had registered a complaint after the State Bank of India claimed a loss of Rs 2,929.05 crore resulting from alleged misappropriation by Reliance Communications and Anil Ambani.

What has happened earlier

The lender, SBI first 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 for a minimum of five years.

In March 2023, the Supreme Court ruled 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’.

On 22 August 2025, the CBI secured search warrants from a special court in Mumbai and carried out raids at premises linked to Ambani and RCom two days later.