2 Anil Ambani's firms' accounts declared fraud by bank

New Delhi: Karnataka Bank has now declared the accounts of Anil Ambani-led Reliance Home Finance (RHF) and Reliance Commercial Finance (RCF) as ‘fraud’. The two companies have a combined loan outstanding of around Rs 160 crore to the bank. While RHF has a loan outstanding of Rs 21.94 crore, RCF has Rs 138.41 crore as outstanding.  

Karnataka Bank has informed Reserve Bank of India (RBI) with regards to the ‘frauds’ in the credit facilities given to the two firms, the lender said in a regulatory filing.

The bank has been lending to RHF since 2015 and to with RCF since 2014. As far as loans to RHF, a total of 24 banks were part of a banking arrangement. On the hand, 22 banks were part of loans to RCF. 

Karnataka Bank’s share in the multiple banking arrangement to RHF is 0.39 percent and to that of RCF is 1.98 percent. Karnataka Bank has made related provision to the tune of 100 percent for the bad loans to the two firms.

"Both the accounts were classified as NPA (non-performing assets) and have been fully provided for. As such, there is no impact on the financials of the bank going forward," Karnataka Bank said.