Anil Ambani's Loan Account Withdrawal: Canara Bank Drops Fraudulent Classification

Canara Bank has withdrawn its order classifying Anil Ambani's loan account as "fraudulent". The bank informed the Bombay High Court that it has withdrawn the order after Ambani challenged it, arguing that he was not given a hearing before the classification. The High Court disposed of the petition, saying nothing survives in it, and directed the bank to inform the RBI of the withdrawal order. The loan account concerned Ambani's firm Reliance Communications, which is undergoing insolvency proceedings.

Canara Bank has withdrawn its order classifying Anil Ambani's loan account as "fraudulent," following a challenge by Ambani in the Bombay High Court. The bank informed the court on July 10, 2025, that it has rescinded its order, which had labeled Reliance Communications' loan account as fraudulent [1].

The issue began in November 2024 when Canara Bank labeled the loan account of Reliance Communications, a company promoted by Anil Ambani, as fraudulent. Ambani challenged the move in the Bombay High Court, stating that the bank had not followed proper procedure before taking such a serious step [1].

Earlier on June 2, The State Bank of India (SBI) also classified the loan account of Anil Ambani’s Reliance Communications as ‘fraud’ [2]. Reliance Communications is currently undergoing insolvency proceedings, and Anil Ambani used to be the firm's former director [2].

The legal bench comprising Justice Revati Mohite Dere and Justice Neela Gokhale disposed of Anil Ambani's petition challenging the bank's order, after the disclosure was filed in the Bombay High Court. The court directed that the withdrawal of the order will also be informed to the banking regulator, the Reserve Bank of India (RBI) [2].

Canara Bank's case on the loan account was based on the RBI’s master circular on fraud accounts, which provides a guideline for such declarations. The Bombay High Court stayed the order pending the hearing of the plea [2].

Anil Ambani challenged the order and argued that the fraud classification was issued on 8 November 2024 but was only communicated to him on 25 December 2025, after the High Court put a stay on a similar decision [1]. Ambani also claimed that Canara Bank had informed the RBI about the fraud classification on 6 September 2025, before officially issuing the order [1].

The withdrawal of the fraud tag by Canara Bank follows a series of legal challenges and regulatory scrutiny. The case highlights the importance of procedural fairness and transparency in banking regulations, particularly in cases involving high-profile individuals and companies [1, 2].

References:
[1] https://www.financialexpress.com/business/industry-canara-bank-withdraws-fraud-tag-on-anil-ambanis-loan-account-report-3909559/
[2] https://www.livemint.com/industry/banking/canara-bank-withdraws-order-classifying-anil-ambanis-loan-account-fraudulent-informs-bombay-high-court-11752136539179.html