Reliance Communications Limited (RCOM) has informed stock exchanges that Canara Bank has classified its loan accounts as fraud and directed reporting of the company to the Reserve Bank of India’s Central Fraud Registry.

The company disclosed the development through a regulatory filing dated March 6, 2026, in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The bank has taken similar action against Reliance Telecom Limited (RTL), which is a subsidiary of Reliance Communications.

Both companies have received official letters dated February 27, 2026, which were received by them on March 6, 2026.

The letters state that the bank has classified the borrower accounts of the companies as fraud and will report them to the Reserve Bank of India so that the cases can be reflected in the Central Fraud Registry.

Background of Reliance Communications

Reliance Communications Limited was once one of India’s leading telecommunications companies and was part of the Reliance Group led by Anil Ambani.

The company played a significant role in the early growth of India’s mobile telecom sector, providing services including:

• Mobile telephony

• Enterprise telecom solutions

• International data connectivity

• Broadband services

However, intense competition, high debt levels, and the telecom sector’s pricing wars significantly impacted the company’s financial health.

As a result, Reliance Communications entered insolvency proceedings under the Insolvency and Bankruptcy Code (IBC).

Since June 28, 2019, the company has been under the Corporate Insolvency Resolution Process (CIRP) after the National Company Law Tribunal (NCLT), Mumbai Bench, admitted the insolvency case.

During this period, the management powers of the company’s board have been transferred to the Resolution Professional, Mr. Anish Niranjan Nanavaty.

Details of the Fraud Classification

According to the information shared in the regulatory filing, Canara Bank has classified the borrower accounts of Reliance Communications and its subsidiary as fraud.

The decision was taken based on findings linked to earlier financial transactions involving the companies.

The classification also requires the bank to report the case to the Reserve Bank of India, which maintains a Central Fraud Registry to track fraud cases involving financial institutions and borrowers.

The key details are:

Company involved

• Reliance Communications Limited

• Reliance Telecom Limited (subsidiary)

Bank involved

• Canara Bank

Action taken

• Accounts classified as fraud

Regulatory reporting

• Case to be reported to the RBI Central Fraud Registry

This registry allows banks and financial institutions to track fraud cases and prevent further lending to entities involved in such cases.

Credit Facilities Involved

The fraud classification relates to credit facilities that were provided by Canara Bank to Reliance Communications in the past.

According to the details mentioned in the bank’s communication, the company had availed several financial facilities including:

• Term loans

• Bank guarantees

• Non-fund based limits

These facilities were sanctioned in 2013 and 2014.

The total credit exposure from the bank was around Rs 1,790 crore.

The account later became a Non-Performing Asset (NPA) on September 29, 2017 after the company failed to service its debt obligations.

Forensic Audit Findings

The classification of the account as fraud is linked to the findings of a forensic audit conducted by BDO India LLP.

The forensic audit was commissioned by the lead bank, State Bank of India (SBI).

The review period for the audit covered financial transactions between:

April 1, 2013 and March 31, 2017

The final forensic audit report was submitted on October 15, 2020.

The report reportedly identified certain financial irregularities, which eventually led lenders to classify the account as fraud.

Such forensic audits are commonly conducted when lenders suspect:

• Misuse of funds

• Diversion of loan proceeds

• Irregular financial transactions

Based on the findings of the audit, lenders may take regulatory actions such as fraud classification and reporting to the RBI.

Similar Action Against Reliance Telecom Limited

The fraud classification is not limited to Reliance Communications alone.

Reliance Telecom Limited (RTL), a subsidiary of RCOM, has also received a similar letter from Canara Bank.

The bank has informed RTL that its borrower accounts have also been classified as fraud and will be reported to the RBI Central Fraud Registry.

Like the parent company, Reliance Telecom is also undergoing insolvency proceedings under the Insolvency and Bankruptcy Code.

Resolution plans for the subsidiary have already been approved by the committee of creditors and are currently awaiting final approval from the NCLT Mumbai bench.

Impact of Insolvency Proceedings

Both RCOM and RTL are currently undergoing the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016.

During the insolvency process, several legal protections are provided to companies.

One of the key provisions is Section 14 of the Insolvency and Bankruptcy Code, which imposes a moratorium on legal proceedings against the company.

This means that:

• No new lawsuits can be initiated

• Existing legal actions are temporarily suspended

• Creditors cannot enforce recovery through courts during the moratorium period

These protections help ensure that the company’s assets are preserved while a resolution plan is being finalised.

Resolution Plan Awaiting NCLT Approval

The resolution plans for both Reliance Communications and Reliance Telecom Limited have already been approved by their respective committees of creditors.

However, the plans are currently awaiting final approval from the National Company Law Tribunal (NCLT), Mumbai Bench.

Once the tribunal approves the resolution plan, it will determine:

• Future ownership structure

• Debt repayment mechanisms

• Revival or liquidation of business operations

The insolvency process is designed to maximize value for creditors and potentially revive financially distressed companies.

Legal Protections Under the Insolvency Code

The company has also highlighted certain legal protections available under the Insolvency and Bankruptcy Code.

One of the key provisions is Section 32A, which provides immunity to a corporate debtor after a resolution plan is approved by the NCLT.

Under this section:

• The company can receive immunity from liability for offences committed before the insolvency process began

• New management taking over the company cannot be prosecuted for past offences committed by the previous management

This provision was introduced to encourage new investors to acquire stressed companies without inheriting past legal liabilities.

Role of the Resolution Professional

Since the start of the insolvency process, the operations and affairs of Reliance Communications have been managed by the Resolution Professional.

The Resolution Professional is responsible for:

• Managing the company’s assets

• Conducting transaction audits

• Identifying potential irregularities

• Filing applications related to avoidance transactions

In the case of RCOM and RTL, the resolution professionals have already filed applications related to certain transactions before the NCLT, which are currently under judicial consideration.

Legal Review and Next Steps

Following the communication from Canara Bank, Reliance Communications has stated that the matter is currently under examination and legal advice is being sought.

The company will likely evaluate:

• Possible legal remedies

• Impact on ongoing insolvency proceedings

• Regulatory implications

The final outcome will depend on:

• Decisions by the National Company Law Tribunal

• Findings of ongoing legal proceedings

• Implementation of the resolution plan

Broader Impact on the Telecom Sector

The development highlights the financial stress faced by telecom companies during the previous decade, when heavy investments in spectrum, infrastructure, and intense competition significantly increased debt burdens.

Reliance Communications was one of several telecom companies that struggled during this period.

The sector has since undergone major consolidation, leaving only a few large players such as:

• Reliance Jio

• Bharti Airtel

• Vodafone Idea

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