Canara Bank Tags Reliance Communications as Fraud Account

Canara Bank has declared loans given to Reliance Communications and its unit as fraudulent. The bank alleged that the Anil Ambani-promoted company misappropriated Rs 1,050 crore by diverting funds for purposes other than sanctioned. Reliance Communications refuted the allegations, stating the loans were taken before insolvency proceedings began and are protected under insolvency laws. The bank claims that reasons for classifying the accounts as fraud were non-utilization of funds as per sanctioned terms and inter-company transactions to pay other debts. However, Reliance Communications, which went bust in 2018, said that the company is undergoing an insolvency resolution process. Since the loans were availed before the company moved to insolvency, it is protected from any kind of lawsuits made by any debtor. Further, the classification of loan accounts as fraud will not have any bearing on the ongoing insolvency procedure, it said.