By Anirudha Yerunkar
The recent actions of State Bank of India (SBI) and Canara Bank against industrialist Anil Ambani and his company Reliance Communications (RCOM) have raised serious questions about the decision-making practices of these banks. The conditional withdrawal of such actions points weather there is lack of transparency and credibility in their processes.
The Legal counsel representing Anil Ambani has said that State Bank of India’s action against RCom chairman and managing director Anil Ambani does not follow principles of natural justice as laid down by the Supreme Court.
“SBI’s ex-parte action against Ambani is in violation of the principles laid down by the top court, according to the counsel. SBI must reconsider its actions in this matter, as it has already withdrawn show-cause notices issued against five other non-executive directors”, stated the counsel, highlighting that no personal hearing is allowed to the Anil Ambani.
SBI India’s largest public sector bank has withdrawn the show-cause notices issued against five non-executive directors of RCOM. Earlier, on July 10, 2025, Canara Bank, one of RCOM’s consortium lenders, had also unconditionally withdrawn its decision to classify Reliance Communications’ accounts and Anil Ambani as fraud before the Bombay High Court.
These back-and-forth moves have raised allegations of arbitrary and discriminatory functioning within the banking system. They directly question the fairness and impartiality of the banks’ decision-making processes.
One of the major allegations is that SBI never gave Anil Ambani a chance to present his side of the case before linking him with these classifications. According to a media report, this can be seen as a clear violation of the Supreme Court’s “Principles of Natural Justice.”
The recent actions of SBI linked to RCom and Ambani, have raised serious concerns about the transparency, fairness, and impartiality of the bank’s decision-making process, according to RCom’s counsel.
“SBI’s order was passed ex-parte, without giving Mr. Anil D. Ambani a chance to present his case. This denial of a fair hearing clearly shows that the Principles of Natural Justice as laid down by Hon’ble Supreme Court were not followed. Such one-sided decisions not only weaken confidence in the bank’s credibility but also set a troubling precedent for how financial institutions treat stakeholders, especially when the reputational and financial impact is severe,” said the counsel.
What Is Judicial And Regulatory Framework?
The denial of a personal hearing to Anil Ambani goes against fundamental principles of fairness. More importantly, it shows that both SBI and Canara Bank bypassed established judicial and regulatory frameworks.
Several landmark cases have already established precedence in such matters, including:
SBI vs. Rajesh Agarwal (2023)
T. Takano vs. SEBI (2022)
Ankit Bhuwalka vs. IDBI Bank (2025)
Milind Patel vs. Union Bank of India (2024)
In all these cases, courts had stated that an account cannot be classified as fraud unless full documentation (complete disclosure) supports the claim, and the affected individual is given an opportunity to be heard. According to a media report, in Anil Ambani’s case, these precedents were ignored.
What Are Current Actions By SBI And Canara Bank?
The Reserve Bank of India’s guidelines mandate that banks must strictly adhere to principles of fairness and due process. By bypassing these binding rules, SBI appears to have acted in violation of the rule of law.
Canara Bank, which earlier declared RCOM’s accounts and Anil Ambani as “fraud,” withdrew its classification unconditionally in the Bombay High Court on July 10, 2025. This reversal raised questions about the bank’s decision.
SBI also withdrew notices issued against five non-executive directors of RCOM, who had no role in the company’s day-to-day operations.
The 5 Non-Executive Directors Named in SBI’s Notice
Mr. Arun Kumar Purwar – Former Chairman, State Bank of India
Mr. Raj Narain Murari L. Bhardwaj – Former Chairman & Managing Director, LIC
Mrs. Manjari Ashok Kacker – Former Member, Central Board of Direct Taxes
Mr. Deepak Haridev Shourie – Former Director, BBC Worldwide Media
Prof. Jayaraman Ramachandran – Former Professor, Corporate Strategy, IIM Bangalore
