CBI searches Reliance RHFL, RCFL premises in bank-fraud probe

The Enforcement Action

The Central Bureau of Investigation (CBI) on 18 July 2026 searched 15 premises across Delhi and Mumbai as part of its investigation into alleged bank fraud at two Reliance Anil Dhirubhai Ambani (ADA) Group lenders, Reliance Home Finance Limited (RHFL) and Reliance Commercial Finance Limited (RCFL). According to the case as reported, the searches spanned 23 interlinked group entities and relate to seven first information reports (FIRs) in which the aggregate alleged loss to public sector banks and the Life Insurance Corporation of India is put at about Rs 27,337 crore.

The agency alleges that bank funds were routed through conduit borrowers and onward to other group companies. As reported, the CBI has already searched 38 locations in the wider matter, filed four chargesheets and arrested seven accused who remain in judicial custody, and the investigation is being monitored by the Supreme Court. The premises covered on 18 July are said to include those connected to former senior officers of the lenders, described as a former chief financial officer, a former secretarial head and a former treasury consultant. No fresh arrests were announced.

An FIR, a chargesheet and a search are investigative steps, not findings of guilt. The underlying diversion, though, is already on the official record. In a final order dated 22 August 2024 (reference WTM/AN/CFID/CFID_1/30660/2024-25), the Securities and Exchange Board of India (SEBI) found that RHFL's funds had been channelled to promoter-linked entities, and it restrained the group's promoter, Anil D. Ambani, and two dozen other noticees from the securities market. The individuals contested SEBI's case during those proceedings, as the order records, and SEBI orders are appealable to the Securities Appellate Tribunal.

How the Scheme Worked

The mechanism is set out in SEBI's order, which examined RHFL's lending across a forensic review period of 1 April 2016 to 30 June 2019. SEBI's whole time member, Ananth Narayan G., recorded that the company had extended large "General Purpose Corporate" loans, also called GPC or general purpose working capital loans, to borrowers with weak financials, thin assets and little apparent ability to repay. Corporate loans on RHFL's books rose to Rs 8,670.80 crore in 2018-19, even as the company's own board had, on 11 February 2019, directed that no further GPC loans be issued.

Drawing on a forensic auditor's fund-tracing exercise, the order records that "an amount of INR 12,573.06 Crore has been disbursed under 150 Loan Cases" to entities it classed as Potentially Indirectly Linked Entities, of which loans worth Rs 8,884.46 crore were still outstanding at the time of review. SEBI found that money advanced to these borrowers was onward lent to entities connected to the promoter group, and it flagged potential evergreening of loans and circular transactions in which sums flowed back to RHFL as apparent repayment of earlier borrowings.

The regulator treated this pattern, taken as a whole, as a fraudulent scheme by which the listed company's funds were diverted while the arrangements were presented to shareholders and lenders as ordinary lending. The order traces the procedural history from multiple complaints, through a forensic review commissioned in 2020, to an interim order and show-cause notice, and finally to the findings of 22 August 2024. The CBI's seven FIRs concern the same broad conduct, but as a criminal matter to be proved to a different and higher standard.

The Law Invoked

SEBI's final order was passed under sections 11(1), 11(4), 11(4A), 11B(1) and 11B(2) of the SEBI Act, 1992, the provisions that let the regulator issue remedial and preventive directions such as debarment. The show-cause notice invoked section 12A(a), (b) and (c) of the Act, which prohibits fraudulent and manipulative dealing in securities, read with regulations 3(b), (c) and (d) and 4(2)(f), (k) and (r) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003.

For penalties, the order applied section 15HA (the penalty for fraudulent and unfair trade practices), section 15HB (a residual penalty) and section 15A(a) (failure to furnish information). Anil D. Ambani was penalised Rs 25 crore under section 15HA, restrained from the securities market for five years and barred for five years from being a director or key managerial person in any listed company or SEBI-registered intermediary. RHFL itself was restrained for six months.

The CBI's cases proceed under the criminal law dealing with cheating, criminal breach of trust and criminal conspiracy. The precise penal sections form part of the FIRs and chargesheets, which are not public documents, so they are not reproduced here.

What Happens Next

The two tracks run separately. On the criminal side, the CBI's searches feed an ongoing investigation; where it has already filed chargesheets, the trial court will consider whether to take cognisance, frame charges and proceed to trial, at which the accused can contest the evidence. Because the Supreme Court is monitoring the matter, progress is reported to the court periodically. Any arrest, custody or bail decision is a stage in that process and not a determination of guilt.

On the regulatory side, SEBI's order of 22 August 2024 can be, and has been, carried in appeal to the Securities Appellate Tribunal, whose ruling can in turn be appealed to the Supreme Court on a question of law. The order also recorded that SEBI would separately quantify the illegal gains made through the scheme and act further in accordance with law. None of this alters the fact that, for now, the criminal allegations remain allegations, subject to due process.

What It Means

For ordinary savers, the practical lesson is about the entities behind a product rather than the marketing around it. RHFL had listed securities and public debenture holders, and a diversion of this kind hits precisely those investors and lenders left holding paper against a hollowed-out balance sheet. It is a reminder to check the regulated status and financial health of any deposit-taker, non-banking lender or bond issuer before committing money.

Investors can verify an intermediary's registration on SEBI's website and a bank's or non-banking finance company's licence on the Reserve Bank of India's site, and can read a lender's audited accounts and rating actions before subscribing to its deposits or bonds. Where an account has already been classified as fraud by lenders, recoveries typically run through the courts, the tribunals and any resolution or insolvency process, and can take years. The calm takeaway is not alarm but diligence: concentrated exposure to a single promoter group's paper is the risk this category of case keeps exposing.

FAQ

Does a CBI FIR or SEBI order mean the people named are guilty?

No. A chargesheet, FIR or provisional attachment contains allegations, not findings of guilt; the accused are presumed innocent until proven guilty, and due process continues. SEBI's separate order is a regulator's civil finding, itself appealable to the Securities Appellate Tribunal, and not a criminal conviction.

What exactly did SEBI find and order?

SEBI found that RHFL's funds were diverted to promoter-linked entities through general purpose corporate loans to weak borrowers. In its order dated 22 August 2024 it restrained Anil D. Ambani and two dozen other noticees from the securities market, barred him for five years as a director or key managerial person, and imposed a Rs 25 crore penalty on him under section 15HA.

Can these actions be appealed?

Yes. A SEBI order can be challenged before the Securities Appellate Tribunal and thereafter, on a question of law, before the Supreme Court. In the criminal cases, the accused can contest charges at trial and pursue the usual appellate remedies. An FIR or chargesheet is the start of a legal process, not its conclusion.

How can I check if a lender or adviser is registered?

Registered intermediaries and their status can be verified on SEBI's website, and banks and non-banking finance companies on the Reserve Bank of India's site. Reading audited accounts, credit-rating actions and regulatory disclosures before investing in a company's deposits or bonds is a simple, effective safeguard.

What should affected RHFL investors do?

Investors holding affected securities should track filings by the company, the exchanges and any administrator or resolution professional, and follow the SEBI proceedings and the court-monitored investigation for orders that affect recoveries. Professional legal advice is advisable for those pursuing claims, as recoveries in diversion cases usually run through tribunals and courts over an extended period.

Where can I read the official order?

SEBI's final order dated 22 August 2024 in the matter of Reliance Home Finance Limited is published in the enforcement section of sebi.gov.in and sets out the findings, the fund-tracing figures and the statutory provisions in full.

This report is based on the official SEBI final order dated 22 August 2024 in the matter of Reliance Home Finance Limited. The linked CBI search action was surfaced via coverage carried on Google News.