MUMBAI, July 11 -- The Canara Bank has withdrawn its order classifying as "fraudulent" the loan account of Anil Ambani-led Reliance Communications (RCom), currently undergoing insolvency proceedings. The disclosure was made before the Bombay High Court on Thursday. Following the bank's submission, a division bench of justices Revati Mohite Dere and Neela Gokhale disposed of a petition filed by Ambani challenging the fraud classification, noting that nothing survived in the plea. The court also directed that the withdrawal be communicated to the Reserve Bank of India (RBI). The public sector lender had initially classified the account as fraudulent on November 8, 2024, citing alleged irregularities in a Rs.1,050 crore loan disbursed in 2017. The loan was reportedly routed to a group company for settling dues to related parties-an action the bank said contravened norms under the RBI's master circular on fraudulent accounts. However, Ambani challenged the order, arguing that Canara Bank had violated principles of natural justice by not granting him a personal hearing before issuing the classification. His counsel pointed out that the bank informed the RBI of the fraud classification as early as September 6, 2024, but only communicated the order to Ambani on December 25-after the HC had already stayed a similar order in a related matter. On February 8 this year, the High Court stayed Canara Bank's order, noting that the action appeared to breach both RBI guidelines and a Supreme Court ruling that mandates borrowers be given an opportunity to be heard before being declared fraudulent. The court had also questioned whether the RBI was taking adequate action against banks repeatedly ignoring these requirements. In a letter dated July 2, Ambani's legal team has challenged the SBI classification, arguing that the order was passed ex-parte and without a personal hearing....