Canara Bank Retracts Fraud Label on Anil Ambani's Firm

Canara Bank has officially revoked its earlier decision to categorize the loan account of Reliance Communications, linked to industrialist Anil Ambani, as 'fraudulent'. This move, disclosed to the Bombay High Court, has effectively resolved the petition Ambani filed against the bank's initial order.

The legal process began when Canara Bank, on November 8, 2024, branded the account as a 'fraud', citing the misrouting of a Rs 1,050 crore loan to pay obligations to related entities. This classification was based on the Reserve Bank of India's guidelines, which necessitate thorough verification before declaring accounts as fraudulent.

The High Court had temporarily stayed the bank's fraud order in February, questioning the adherence to RBI guidelines that emphasize borrower hearings before such declarations. Ambani contested that the bank informed him of the fraud label after the court's prior stay in a related matter, underscoring procedural discrepancies.

(With inputs from agencies.)