BOI Classifies Loan Account of Reliance Communications as ‘Fraud’

 

Reliance Communications Limited, its promoter and former director, Shri Anil Dhirajlal Ambani, and its former director, Smt. Manjari Ashok Kacker, have had their loan accounts classified as "fraud" by Bank of India.

The Bank of India has also decided to label the loan accounts of RTL (the company's subsidiary), Smt. Grace Thomas (the former director of RTL and current director of the company), and a few other individuals (named in the RTL Letter) as "fraud." This decision was communicated in a letter to Reliance Telecom Limited (RTL), a subsidiary of the company.

Bank of India approved a 700 crore rupee term loan. As of 07/08/2025, there were 724.78 crores that were still owed. The loan was approved to cover a short-term discrepancy brought on by investments made in the purchase of 3G spectrum and associated capital expenditures. There was no guarantee when the loan was approved.

On June 30, 2017, the borrower's account became non-performing, with Rs 724.78 crores still owed. Although the Bank has been pursuing the borrowers and guarantors to collect the debt, they have not fulfilled their obligations.

Through M/s BDO India LLP, the bank carried out a forensic audit after the account became non-performing. The appropriate authority was presented with the results of the forensic audit. The following observations, findings, and conclusions of the forensic audit have led the competent authority to conclude that there are suspected fraudulent connotations after reviewing the audit:

In accordance with the review letter, Bank of India paid RCOM INR 350.00 Crores in a letter dated October 3, 2016, for "ongoing Capital exp, operational expenditure, repayment of existing liabilities other than related party / shareholder loans."

Loan Diversion: Fixed deposits totaled INR 350.00 crores.

A loan of Rs. 350 Cr was raised by the BOI on March 27, 2015, to cover spectrum fees. MF held the loan amount until April 7, 2015.A loan of Rs. 310.00 Cr was raised by SCB on March 30, 2015. FD was made on April 7, 2015, for a total of Rs. 632.50 Cr (BOI Rs. 350 Cr + SCB Rs. 310 Cr). RCOM obtained an equivalent loan of Rs. 632.50 Cr from BOI in order to pay the DOT Government of India for the Spectrum fees in relation to the aforementioned FD.

FD was liquidated on June 11, 2015, and the Rs. 632.50 Cr BOl loan was paid back. The payment of operational expenses was made with the full amount of the BOI loan.

The sanction letter stated that using the loan funds to invest in fixed deposits was prohibited; therefore, this is regarded as non-compliance with sanction terms of the loan.

Borrower requested that the company is undergoing Corporate Insolvency Resolution Process (CIRP) and thus the account should not be classified as Fraud.

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Bank of India(BOI) eyes listing of mutual fund, life insurance arms

Like other public sector banks like State Bank of India and Canara Bank, which have either investigated or started IPO plans for their subsidiaries, Bank of India (BOI) is thinking about offering its mutual fund and life insurance divisions as the initial candidates for possible market listing.

“We do see our mutual fund and insurance subsidiaries as the most likely to be off the block when the time is right,” said Rajneesh Karnatak, MD & CEO of Bank of India. “But not in this financial year. Our focus right now is on growing these platforms organically, expanding distribution, and ensuring they are strategically aligned with our core banking business.”

Public sector banks (PSBs) were asked by the finance ministry in June of this year to consider listing their subsidiaries on stock exchanges in order to generate revenue from their investment after further expanding their business activities. Before entering the capital markets, BOI is adopting a more methodical strategy, giving scale and value first priority. 

 As of July 2025, 7,62,969 investor folios across 20 equity, hybrid, and debt funds totaled Rs 13,183 crore under managed of BOI Mutual Fund, a wholly owned subsidiary of BOI. The life insurance division of BOI owns a 27.5% share in Star Union Daiichi. The life insurance generated Rs 8,033 crore in net premium income for FY25.

As of July 2025, the life insurance firm held a 3.25% market share among private insurers based on first premiums. Our subsidiaries are strategic levers that enhance our core banking operations and enable us to provide our clients with a full-spectrum financial ecosystem; they are not merely supplementary enterprises. 

 Life insurance and mutual funds are essential components of our client interaction approach and cross-selling strategy, Karnatak stated. In order to unlock short-term value, we are not in a haste to list these subsidiaries. Our priorities are increasing distribution, boosting operational metrics, increasing profitability, and foremost creating embedded value. We will think about listing the companies if we get to a point where they are established and scalable," he continues.

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Bank of India(BOI) Q1 result: Net profit soars 32.2% YoY

 

The public sector lender Bank of India (BOI) reported a 32.3 per cent year-on-year rise in net profit to ₹2,252 crore for the April–June quarter (Q1FY26), aided by a surge in treasury income.

Its Net Interest Income (NII) shrank by 3.3 per cent to ₹6,068 crore in Q1FY26, compared to ₹6,275 crore in the same quarter a year ago (Q1FY25). Net interest margin (NIM) declined by 52 basis points YoY to 2.55 per cent in Q1FY26 from 3.07 per cent in Q1FY25.

R. Karnatak, Managing Director and Chief Executive Officer, BOI, said there will be some additional pressure on margins in the second quarter. The repricing of deposits, which began in October 2024, will be completed by October, providing a benefit for margins. He stated that margins have bottomed out but did not give estimates for NIM.

 

The bank’s non-interest income, comprising treasury, fees, commissions, etc., grew by 66.4 per cent YoY to ₹2,166 crore in Q1FY26. Profit from treasury activities, including the sale and revaluation of investments, grew almost four times to ₹820 crore in Q1FY26 from ₹166 crore a year ago.

Provisions for non-performing assets (NPAs) declined to ₹1,104 crore in Q1FY26, down from ₹1,216 crore in Q1FY25.

 

Advances grew 12.02 per cent YoY to ₹6.72 trillion in Q1FY26. Retail, agriculture, and MSME advances grew by 16.27 per cent YoY to ₹3.28 trillion in the June quarter of FY26.

Total deposits increased 9.07 per cent YoY to ₹8.33 trillion. The share of low-cost deposits—current accounts and savings accounts (CASA)—declined to 39.88 per cent at the end of June 2025, down from 42.68 per cent a year ago. The bank has guided for 10-11 per cent growth in deposits in FY26.

 

The bank’s asset quality improved, with gross NPAs declining to 2.92 per cent in June 2025 from 4.62 per cent in June 2024. Net NPAs also declined from 0.99 per cent in June 2024 to 0.75 per cent in June 2025. The provision coverage ratio (PCR), including written-off accounts, improved to 92.94 per cent in June 2025 from 92.11 per cent in June 2024.

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CBI arrests proclaimed offender in historical bank fraud case involving Rs 5.69 lakh at Bank of India(BOI)

Satish Kumar Anand, who was designated a Proclaimed Offender in a bank fraud case involving ₹5.69 lakh from Bank of India, has been taken into custody by the Central Bureau of Investigation (CBI). The case began on May 5, 1978, when the CBI filed a complaint against three individuals:

1. The Branch Manager of a Bank of India branch
2. Satish Kumar Anand
3. Ashok Kumar

CBI alleged that the branch manager and Satish Kumar Anand worked together in a criminal conspiracy to cheat the bank.

• The bank manager, while working at the branch in 1977, sanctioned a loan to a private company.
• The loan was given based on fake receipts and false bills, showing goods had been sent out, when in reality, no such shipment took place.
• As a result, the bank lost ₹5.69 lakh, and this amount wrongfully benefited Satish Kumar Anand.

After investigating, CBI filed a chargesheet in the Special CBI Court in Dehradun.

• In 1985, the court convicted Satish Kumar Anand and Ashok Kumar, sentencing both to 5 years of rigorous imprisonment and a fine of ₹15,000.
• The bank manager was acquitted (found not guilty).

How Did Satish Kumar Anand Become a Proclaimed Offender?

After being convicted, Satish Kumar Anand disappeared and did not serve his jail sentence. The CBI Court in Dehradun, on 30 November 2009, officially declared him a Proclaimed Offender, which means he was legally marked as an absconder.

After years of being on the run, CBI arrested Satish Kumar Anand on 25th June 2025. He will now be presented before the Special CBI Court in Dehradun, where further legal action will be taken.

More details will be released soon.

Source -hellobanker.in

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Supreme Court opens FIR Against Bank of India(BOI) in Gold Loan Case

A businessman obtained a loan from the Bank of India's Motijhil Branch in order to obtain the money he needed. On July 22, 2020, he was granted a loan of ₹7,70,000 after pledging 254 grams of 22 carat gold pieces as security. The payback of this loan is the point of contention. 

The appellant claims that after receiving a notification from the bank on October 7, 2022, requesting payment of ₹8,01,383.59, including interest, he paid the amount on March 31, 2023. He was unaware that the bank had revalued the gold he had pledged and had taken ₹1500 out of it for expenses.

His requests to return the gold that had been committed were denied for years. However, the bank claims that he failed to repay the loan, which is why the gold became a bank asset. 

 When it was purportedly reported by a valuer other than the one who had initially assessed the appellant's gold at the time of the loan that the material pledged was not gold in reality but rather gold plated on top of other metals, the aforementioned gold was revalued in order to recover the money involved in the transaction and was discovered to be counterfeit.

Additionally, the appellant filed a formal complaint against the bank's branch and credit manager for violations of Sections 420, 406, and 34 of the Indian Penal Code. 

The Patna High Court granted the respondent's (bank manager's) request to have the FIR quashed. A Special Leave Petition (SLP) has been submitted in response to this. The FIR against the bank has now been reopened by the Supreme Court.

Court Order

A bench of Justice Sanjay Karol and Justice Manoj Misra said that the High Court had looked at the bank’s policy to prevent and detect fraud and also considered the removal of the first valuer. 

Based on this, the High Court concluded that the bank had no bad intentions. It also said that the person who filed the case (the appellant) had tried to get a loan from the bank with bad intentions.

However, the judges of the Supreme Court stated that they were unable to comprehend how the High Court arrived at this result because genuine evidence is necessary to determine someone's purpose. They further questioned how, in the absence of evidence, the High Court determined that the applicant had a hidden motivation. 

 The Court added that there's still a chance the bank misappropriated money. When the High Court dismissed the FIR (police report), it failed to adequately take this into account. Furthermore, the bank failed to have a third party confirm the second valuer's findings. 

 Therefore, it is impossible to say with certainty that nobody from the bank or the valuers did anything improper with the gold that the appellant pledged without considering all of the available evidence.

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Fraud found in PSB & Private Banks as per AIBEA data

 EFFICIENCY PARAMETER OF BANKS BASED ON NO. OF FRAUDS REPORTED

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Attack on the Bank of India(BOI) Loan Recovery Team

A Bank of India team was violently attacked in Farrukhabad during what should have been a routine debt recovery exercise, underscoring the increasing difficulties that bank officers occasionally experience in the course of their work. In a matter of minutes, the normally tranquil environment around the Sai Dham Temple at Panchal Ghat descended into chaos.

Under the direction of the branch manager, the bank's debt recovery team had gone to collect a pending loan balance of about ₹4 lakh from a local borrower. Avnish, a PRD jawan and inhabitant of Rakabganj Khurd in the Maudarwaja area, accompanied the squad. During the visit, he was responsible for maintaining order and ensuring security. But things didn't work out as expected. People who were thought to be the borrowers who had refused to pay the debts confronted the crew as they got closer to the scene. A startling change in circumstances ensued. Avnish was allegedly grabbed by the accused and beaten. The bank manager and other team members had to leave the area in their car since the situation rapidly got out of hand.

Avnish was later taken to the hospital for medical examination. The police station under whose jurisdiction the incident falls—Qadri Gate police station—has registered the case and launched an investigation. Preliminary statements from Avnish suggest that the accused deliberately attacked the team to avoid repaying the loan.

This incident raises serious concerns about the safety of bank officials and staff engaged in fieldwork, especially in loan recovery. Bank personnel are increasingly facing resistance, and sometimes violence, while performing their duties. Though they operate within legal frameworks, such situations pose not only a professional hazard but a personal one too.

The case also sheds light on the need for better support mechanisms and legal protection for recovery agents and officers. It emphasizes the importance of ensuring the safety of those working on the frontlines of the financial system.

Authorities have assured that strict action will be taken against the accused. In the meantime, this incident should serve as a wake-up call for financial institutions to review their recovery strategies and for law enforcement to provide necessary backup when required.

Loan default is a serious issue—but violence is never the answer. Respecting the rule of law and engaging in peaceful resolutions must always be the priority, both for banks and for borrowers.

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LIC increases its stake in Bank of India(BOI) to 8.38%.

As of May 9, 2025, the Life Insurance Corporation of India (LIC) now owns 8.38% of Bank of India (BoI). In a regulatory statement to the stock exchanges on Tuesday, Bank of India provided this update. Over the course of almost four years, LIC has acquired an additional 2.026% share in Bank of India. 

 The purchase activity occurred from September 2, 2021, until May 9, 2025. LIC owned 6.35% of the public sector bank prior to this rise. Its overall position has now increased to 8.38% as a result of the latest acquisitions. This action demonstrates LIC's ongoing desire to solidify its place in the Indian public sector banking market.

Impact on Bank of India Shares

Following the disclosure, shares of Bank of India saw a positive response in the market. The stock closed at ₹112.55 on the Bombay Stock Exchange (BSE), which is a 2.27% rise compared to the previous trading day

Why This Matters

LIC is India’s largest institutional investor and plays a significant role in the Indian financial market. When LIC increases its stake in a company, it is often seen as a positive sign of confidence in that company’s performance and future growth.

This increase in LIC’s stake could signal strong trust in the stability and growth of Bank of India, which is one of the major public sector banks in India.

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