Central Bank of India has issued a show-cause notice to Anil Ambani-linked Reliance Communications (RCom) asking the company to make submissions as to why its account should not be declared as ‘fraud’.

The state-run bank has said RCom’s non-repayment of loan is to the tune of Rs 400 crore. This includes Rs 280 crore term loan availed by RCom, Rs 20 crore of term-loan facility for Reliance Telecom (RTL) and Rs 100 crore of performance bank guarantee issued to RTL.

Stating possible diversion of funds and non-compliance with the loan sanction letters, the bank has provided RCom 21 days from the date of receipt of the notice to submit a written reply as to why its loan accounts should not be declared as fraud and reported to the Reserve Bank of India (RBI).

Earlier, the Enforcement Directorate (ED) had registered a fresh case against RCom for an alleged Rs 2,929 crore loan fraud with the State Bank of India (SBI). It has widened the scope of its ongoing money-laundering probe against the group companies linked to Reliance Anil Dhirubhai Ambani Group chairman Anil Ambani.

The show cause notice has come after a forensic audit conducted by BDO India LLP, which revealed that RCom, Reliance Infratel Ltd (RITL) and RTL collectively received Rs 31,580 crore in loan disbursements from various banks. The audit findings raised serious concerns over fund utilisation and adherence to compliance norms.