Robbery on taxpayers’ money! Loan worth Rs 1,537 crores was canceled for just Rs 73 crores, Supreme Court said – ‘There is deep nexus between banks, ARC and borrowers’

The Supreme Court has adopted a very strict stance regarding the country’s banking system and the use of public money. The Supreme Court has said that in many cases there appears to be a deep nexus (Nest of Collusion) between banks, Asset Reconstruction Companies (ARC) and big borrowers. The court warned in clear words that the money deposited with banks is the hard-earned money of the public and taxpayers. Therefore, banks will have to make very serious efforts to recover the loan after giving it. Non-refunding of loan amounts and lax action against defaulters will not be accepted at any cost. What is this whole matter of Rs 1,537 crore? A bench of Chief Justice (CJI) Surya Kant and Justice V. Mohana, hearing the case, said that the court is only concerned about the misuse of public money, which should actually have been spent for the welfare of the country and the public. The Supreme Court made this scathing comment on a PIL in which it has been alleged that the outstanding loan of Rs 1,537 crore of public sector banks (PSU Banks) was settled through two ARCs at a nominal loss of only Rs 73.50 crore. In view of this serious financial misappropriation, the Supreme Court has issued a notice to the Central Government, Reserve Bank of India (RBI) and other concerned departments and sought their response within four weeks. ‘This is just the tip of the iceberg’ – lawyers’ anger erupts in the court During the hearing, the bench expressed deep dissatisfaction with the current methods of disposal of stressed assets (NPAs). The bench acknowledged that though it understands the limitations of interfering in the commercial decisions of banks, it cannot turn a blind eye where the public exchequer is directly being defrauded. Senior advocate Ashwini Kumar Upadhyay, appearing for the petitioners, told the court that a huge amount of loan amount in the country is being transferred to ARC companies at huge discounts, causing huge loss to the country’s revenue. Upadhyay stressed, "This is not an isolated case. This is just a small tip of the iceberg of a bigger game going on in the banking sector."

Demand for high-level judicial commission and CBI investigation. The petition, filed through advocate Ashwani Kumar Dubey, directly demands investigation into the alleged banking scam between ARC companies, public sector banks and a large infrastructure firm based in Noida. The petition seeks direction to the Central Government to: Constitute a judicial commission or expert committee to investigate this entire corporate and banking fraud. Top officials of Reserve Bank of India (RBI), SEBI, Serious Fraud Investigation Office (SFIO), Enforcement Directorate (ED) and CBI should be included in this committee. Noida’s infrastructure company’s game of ‘shell companies’ According to the petition, at the center of this entire controversy is a Noida-based infrastructure construction company, which had taken a huge loan of about Rs 912 crore between 2012 and 2015 from a consortium of seven major banks led by State Bank of India (SBI). After this, a detailed forensic audit of this company was conducted in the year 2018. This audit report found shocking and strong evidence which showed that an amount of more than Rs 902 crore was diverted in violation of rules through shell companies (fake companies), non-existent vendors operating on paper, undeclared bank accounts and suspicious transactions. The Supreme Court has now given strict instructions to break this entire nexus and closely examine the working methods of ARC.