Canara Bank Withdraws Order Classifying Anil Ambani's ₹1,050 Crore Loan Account As Fraudulent; Bombay HC Disposes Plea

Mumbai: Canara Bank on Thursday informed the Bombay High Court that it has withdrawn its November 8, 2024, order classifying industrialist Anil Ambani’s loan account as fraudulent.

A bench of Justices Revati Mohite-Dere and Neela Gokhale was hearing Ambani’s petition seeking to quash the bank’s order. In light of the withdrawal, the court disposed of the plea, noting that nothing survived in the matter. It also directed that the bank’s withdrawal be communicated to the Reserve Bank of India (RBI).

The account in question relates to Ambani’s firm, Reliance Communications, which is currently undergoing insolvency proceedings. The classification was made under RBI’s master circular on fraud accounts. Canara Bank had cited that a ₹1,050 crore loan disbursed in 2017 was allegedly diverted to a group company to settle liabilities with related parties.

Earlier, in February this year, the HC had stayed the bank’s order pending final hearing, observing that the borrower had not been granted a hearing—a requirement under both the RBI’s guidelines and a Supreme Court ruling.

Bombay HC Stays Canara Bank’s Order Declaring Anil Ambani’s Loan Account Fraudulent

Ambani had challenged the classification, contending that it was passed without giving him an opportunity to be heard. He also pointed out that the order was communicated to him only on December 25, weeks after the HC had stayed a similar classification in another case.

He further alleged that Canara Bank informed the RBI about the fraud designation as early as September 6, 2024—two months before officially passing the order.