The Central Bureau of Investigation (CBI) has arrested two former senior executives of Reliance group-linked financial companies in connection with an alleged bank fraud that caused losses of ₹7,623 crore to multiple public sector banks. The agency has taken into custody Devang Mody, former Director and Chief Executive Officer of Reliance Commercial Finance Limited (RCFL), and Ravindra Sudhalkar, former Executive Director and CEO of Reliance Home Finance Limited (RHFL), in separate but related cases.
According to the CBI, the two cases collectively involve alleged losses of ₹7,623 crore to public sector lenders. Of this, the RCFL case is linked to an alleged loss of approximately ₹4,097 crore suffered by 13 public sector banks, while the RHFL case involves an alleged loss of around ₹3,526 crore to 10 public sector banks.
Investigators allege that both executives held key decision-making positions within their respective organizations and played a central role in approving loans and managing company operations. The CBI claims that loans were sanctioned to intermediary and conduit entities despite such lending allegedly being inconsistent with regulatory guidelines and conditions attached to borrowings obtained from public sector banks.
The agency’s investigation has found that Devang Mody served as CEO of RCFL between April 2017 and December 2018. According to the CBI, loans approved during his tenure allegedly violated Reserve Bank of India (RBI) guidelines and the terms governing funds borrowed from public sector banks. Investigators are examining whether due diligence, risk assessment and regulatory compliance requirements were adequately followed during the lending process.
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Similarly, Ravindra Sudhalkar served as Executive Director and CEO of RHFL from October 2016 to March 2022. The CBI alleges that under his leadership, loans were extended to intermediary entities in a manner that was inconsistent with the company’s lending policies, regulatory requirements issued by the RBI and National Housing Bank (NHB), and conditions attached to borrowings from public sector lenders.
A key focus of the investigation is the alleged diversion of funds raised by RCFL and RHFL. According to the agency, a portion of the borrowed money was allegedly routed to other associated entities. Investigators claim that funds were diverted to companies linked to the Reliance ADA Group, resulting in substantial losses to lending institutions while providing financial benefits to related entities.
The CBI has alleged that the movement of funds caused significant financial damage to creditor banks and generated corresponding gains for the entities that received the money. Authorities are examining whether the transactions were structured to conceal the actual end use of the funds and whether lending norms were deliberately bypassed.
The investigation stems from multiple complaints filed by public sector banks and the Life Insurance Corporation of India (LIC). Based on these complaints, the CBI has registered several First Information Reports (FIRs) involving Reliance Communications Limited (RCom), Reliance Home Finance Limited (RHFL), Reliance Commercial Finance Limited (RCFL) and Reliance Telecom Limited (RTL).
Officials are currently scrutinizing loan approvals, utilization of borrowed funds, related-party transactions and the overall fund trail. Banking records, corporate documents and financial transactions between various entities are being examined to determine how the funds were moved and whether any coordinated financial irregularities took place.
Financial crime experts say the case is among the most significant corporate lending investigations in recent years, raising broader concerns about corporate governance, regulatory compliance and risk management practices within large financial institutions. The alleged fraud also highlights the challenges faced by banks in monitoring the end use of funds after large loans are disbursed.
The CBI has indicated that the investigation remains ongoing and that further action may be taken based on evidence gathered from financial records, witness statements and the continuing analysis of fund flows. Authorities are expected to continue examining the role of additional individuals and entities as the probe progresses.
