The Supreme Court Friday expressed concern over what it described as a deep-rooted nexus involving banks, asset reconstruction companies (ARCs) and borrowers, observing that public money could not be lent and subsequently written off without serious attempts at recovery.A bench comprising Chief Justice Surya Kant and Justice V Mohana said its primary concern was the alleged misuse of public funds that could otherwise have been utilised for public welfare.The court issued notices to the Centre, the Reserve Bank of India (RBI) and other respondents on a plea alleging that loans worth Rs 1,537 crore owed to public sector banks were settled through two ARCs for just Rs 73.50 crore.During the proceedings, the bench questioned the manner in which stressed assets were being resolved and raised concerns about the role of various stakeholders in such settlements.“This is a deep-rooted nexus between the borrowers, ARCs and banks,” the bench said as per news agency PTI.The judges acknowledged that courts generally refrain from interfering in the commercial decisions of banks, but indicated that concerns arose when substantial losses were borne by the public exchequer.“But if this is the commercial wisdom that you collect taxpayers’ money, public money and you recklessly release it and give loans and then you don’t make any effort or try to recover it, this kind of conduct is not acceptable,” the bench observed.Appearing for the petitioners, advocate Ashwini Kumar Upadhyay argued that large debts were routinely being transferred at steep discounts, causing significant losses to public finances.“This is not a single case. I am saying it is a tip of the iceberg,” Upadhyay said, while seeking an investigation into the alleged nexus among borrowers, banks and ARCs.The bench also remarked that the functioning of ARCs required closer scrutiny and scheduled the matter for further hearing after four weeks.The petition, filed through advocate Ashwani Kumar Dubey, seeks an investigation into alleged banking irregularities involving public sector banks, ARCs and a Noida-based infrastructure company.Among other reliefs, the plea has sought directions to the Centre “to constitute a judicial commission or an expert committee including officers of the RBI, SEBI, Serious Fraud Investigation Office (SFIO), ED and the CBI to investigate the corporate and banking fraud facilitated by the asset reconstruction companies (ARCs)”.According to the petition, the infrastructure firm secured loans amounting to nearly Rs 912 crore from a consortium of seven banks led by the State Bank of India between 2012 and 2015.It further alleged that a forensic audit carried out in 2018 uncovered evidence indicating that more than Rs 902 crore had been diverted through shell entities, fictitious vendors, undisclosed bank accounts and other suspected fraudulent transactions.The plea, filed by Muzaffarnagar resident Prateeksha and two others, seeks a detailed probe into the alleged banking fraud and the role of ARCs in facilitating it.