India's Federal Agency Files New Fraud Cases Against Former Reliance Companies

India's federal crime agency has launched fresh investigations into alleged fraud at two former Reliance Group companies, involving millions of dollars in disputed loans from state-owned banks. The new cases filed by the Central Bureau of Investigation target Reliance Home Finance and Reliance Commercial Finance, adding to mounting legal troubles for companies once controlled by billionaire Anil Ambani's conglomerate.

The cases emerge from complaints by Union Bank of India and Bank of Maharashtra, which classified the companies' loan accounts as fraudulent in 2024 and 2025, triggering mandatory reporting to investigators. The developments highlight growing scrutiny of India's non-banking financial sector and the legacy of debt-laden companies that previously operated under one of the country's most prominent industrial groups.

Background and Context

The investigations are part of a broader crackdown on financial misconduct in India's shadow banking system, where regulators have stepped up oversight following a series of defaults and fraud scandals in recent years. According to the CBI, the fresh cases are linked to ongoing probes involving significantly larger alleged frauds—55.72 billion rupees against Reliance Home Finance and 92.8 billion rupees against Reliance Commercial Finance.

Both companies were subsidiaries of Anil Ambani's Reliance Group until fiscal year 2023, when they were acquired by Authum Investment & Infrastructure through India's debt resolution process. The transition followed years of financial distress at the Ambani empire, which has been selling assets to reduce its debt burden after a series of defaults and market losses.

Key Figures and Entities

The CBI's statement details specific allegations: a 2.28 billion rupee ($25.4 million) fraud case against Reliance Home Finance based on Union Bank of India's complaint, and a 574.7 million rupee case against Reliance Commercial Finance following Bank of Maharashtra's complaint. The banks had classified these loan accounts as fraud before filing the required complaints with federal investigators.

The companies in question were part of Anil Ambani's financial services vertical before their acquisition. The Reliance Group, once among India's largest conglomerates, has faced persistent financial challenges following the 2016 collapse of its telecommunications business and subsequent defaults across multiple subsidiaries. A spokesperson for the Reliance Group did not immediately respond to queries, though the conglomerate has previously denied fraud allegations in ongoing cases.

Legal and Financial Mechanisms

Under Indian banking regulations, lenders must classify loan accounts as fraud when they detect deliberate defaults or misrepresentation by borrowers. Such classification automatically triggers complaints to investigative agencies like the CBI, which can then pursue criminal charges. The mechanism aims to protect the banking system from willful defaults but has increasingly drawn criticism for creating lengthy legal battles that complicate debt recovery.

In a related development, Reliance Communications, another former Ambani company, disclosed in stock exchange filings that Union Bank of India had also classified its loan account as fraudulent. The pattern of fraud classifications across multiple former Reliance Group companies suggests systemic issues in how loans were structured and utilized during the conglomerate's expansion phase.

International Implications and Policy Response

The investigations underscore broader concerns about corporate governance and financial oversight in India's rapidly growing economy. International investors have increasingly scrutinized Indian companies' debt levels and regulatory compliance following high-profile defaults that have affected both domestic and foreign creditors.

The Reserve Bank of India has implemented stricter regulations for non-banking financial companies in recent years, including enhanced capital requirements and more rigorous supervision of loan practices. However, the Reliance cases demonstrate how legacy issues continue to emerge from India's credit boom years, when regulatory oversight was comparatively relaxed and corporate debt expanded rapidly.

Sources

This report draws on a Reuters investigation published December 9, 2024, official statements from India's Central Bureau of Investigation, stock exchange disclosures, and public records from India's banking regulatory authorities.