New Delhi: The New India Cooperative Bank is in serious trouble, yes you hear it right! A massive ₹122 crore fraud was uncovered, The Economic Offences Wing (EOW) of the Mumbai Police has started investigating allegations that a former senior official, Hitesh Praveenchand Mehta, along with his associates, siphoned off a huge amount of money from the bank.
What are the allegations?
A complaint was filed by Devarshi Ghosh, the Acting CEO of the bank, leading to an FIR at Dadar Police Station. According to the complaint, Hitesh Mehta and his team allegedly misused bank funds from its Prabhadevi and Goregaon branches.
The case falls under sections 316(5) (criminal breach of trust) and 61(2) (criminal conspiracy) of the new Bharatiya Nyaya Sanhita laws. Given the scale of the fraud, the EOW is now handling the investigation.
The Reserve Bank of India (RBI) has taken strict action to protect depositors and ensure better management at the bank. The RBI has:
- Put restrictions on withdrawals, meaning customers can only take out a limited amount of money.
- Banned the bank from issuing new loans or making big financial decisions without RBI’s approval.
- Superseded the bank’s board for a year and appointed Shreekant, a former SBI Chief General Manager, as the new administrator.
- Formed a team of advisors, including ex-SBI official Ravindra Sapra and chartered accountant Abhijeet Deshmukh, to assist in managing the crisis.
Panic Among Depositors
Not surprisingly, customers are worried and many even rushed to the bank’s branches to check if their money is safe, as per the sources, the bank currently holds deposits worth of ₹2,436 crore, with around 1,30,000 total depositors.
To reassure all of its customers, the RBI has reminded everyone that deposits up to ₹5 lakh are insured under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme. This means nearly 90% of depositors are covered and won’t lose their money.
Current Financial Condition of Bank:
The New India Cooperative Bank has been struggling financially and has reported losses of ₹22.78 crore in 2023-24 and ₹30.74 crore in 2022-23. Along with that bank’s loans and advances have also dropped from ₹1,330 crore to ₹1,175 crore over the past year.
