<h1>State Bank classifies telecom firm's Rs 31,580 crore loan as fraud, finds fund diversion to connected parties</h1> State Bank of India has classified a telecom firm's loan account as fraud and will report the company's former director to RBI. The bank's Fraud Identification Committee found misuse of Rs 31,580 crore in loans through complex fund movements across group entities. Investigation revealed 44% of funds were used for loan repayments and 41% paid to connected parties, deviating from sanctioned purposes. The committee identified potential misappropriation including Rs 250 crore diverted through inter-corporate deposits and Rs 248 crore capital expenditure loan misused. The report highlighted fictitious transactions totaling Rs 41,863 crore between group companies, with only Rs 28,421 crore traceable, suggesting manipulation of accounts through fraudulent entries.