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Union Bank of India begins probe into RCom loan

August 14, 2023

Union Bank of India begins probe into RCom loan
The Union Bank of India has started examination of a loan sanctioned to Reliance Communications (RCom) from the angle of fraudulent practice and has sought the company’s response, according to a regulatory filing.

The company is undergoing an insolvency resolution process after it failed to clear vendor dues and other debt.
 
“Company has received a letter from Union Bank of India, with subject ‘Examination of irregularities observed in the Loan Ac 495806390002088 and 495806390002240 from the fraud angle, as per the guidelines of Reserve Bank of India’, asking to submit company’s response or reply on the said irregularities as pointed out by Forensic Auditor,” RCom said in a filing.
 
The Union Bank of India (UBI) in a letter, dated August 7, to RCom said the bank sanctioned from time to time various credit facilities for RCom’s two loan accounts at the company’s request.
 
The bank said that Reliance Communications failed to maintain the loan accounts according to the sanctioned terms, and consequent to the default committed by the company, the accounts became irregular or NPA (non-performing asset).
 
The UBI had appointed BDO India LLP as forensic auditor to investigate the matter after irregularities were found.
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