Bombay HC halts banks’ move to label Anil Ambani accounts ‘fraud’, cites RBI non-compliance

The Bombay High Court on Wednesday, December 24, 2025, stayed all coercive actions by banks on industrialist Anil Ambani to classify his personal and business accounts as "fraudulent," giving him temporary relief.

This ruling provides temporary relief to Ambani who was accused of misappropriating funds and diverting loan proceeds through Reliance Communications (RCom).

While the court previously upheld SBI’s fraud tag against Ambani, this latest stay targets a consortium of other banks based on specific

compliance failures under Reserve Bank of India's Master Directions revised in 2024.

Justice Milind Jadhav restrained Bank of Baroda, IDBI Bank and Indian Overseas Bank from proceeding with show‑cause notices and fraud‑classification steps, stating themselves does not follow the Rule of Law and timelines of the revised directions, according to Bar and Bench.

Under the 2024 rules, any forensic audit used to classify an account as fraud must be conducted by an "external auditor" who is qualified under the Companies Act, 2013.

Ambani’s legal team argued that BDO India, the firm that conducted the forensic audit for the bank consortium, is a "consultancy" and not a registered "auditor" under Indian law.

"The Master Directions of RBI are not a mere paper tiger to enable the Banks to wake up from their deep slumber and initiate action according to their convenience," the judge noted.

He said that the banks' decision to implement rules based on their convenience will "affect the broader economy of the country". 

The development comes just days after the ED Anil Ambani's son Jai Anmol Ambani for the two consecutive days on December 20 over the alleged bank loan fraud. 

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