Supreme Court flags deep-rooted nexus between banks, asset reconstruction companies and borrowers

New Delhi,June 19
Flagging a deep-rooted nexus between banks, asset reconstruction companies and borrowers, the Supreme Court today said that taxpayers’ money being given as loans and then no effective efforts were taken to recover the amount was not acceptable. A bench of Chief Justice Surya Kant and Justice V Mohana said it was only concerned about the misutilisation of public money, which should have been spent for the welfare of people.

The top court issued notice to the Centre, RBI and others seeking their responses on a plea which alleged that a debt of one thousand five hundred and 37 crore rupee owed to public sector banks was settled through two asset reconstruction companies (ARCs) for a mere 73 crore 50 lakh rupees.

During the hearing, the bench raised concerns over the manner in which stressed loans were being settled.
The apex court was hearing a plea that sought a probe into the alleged banking fraud facilitated by the ARCs. The bench observed that there was a dire need to look into the functioning of the ARCs.