Ex-New India Cooperative Bank Manager Booked for ₹122 Crore Fraud
Major Banking Scam Uncovered
Mumbai Police have registered a case against Hitesh Mehta, the former General Manager and Head of Accounts at New India Cooperative Bank. Mehta, along with his associates, allegedly embezzled ₹122 crore from the bank’s Prabhadevi and Goregaon branches. The case has now been transferred to the Economic Offenses Wing (EOW) for further investigation.
Case Registered Under IPC Sections
Mehta and other accused have been booked under sections 316(5) and 61(2) of the IPC, 2023. Following this revelation, the Reserve Bank of India (RBI) removed the bank’s board for a period of 12 months.
RBI Imposes Restrictions on Deposits & Withdrawals
On February 13, 2025, RBI imposed severe restrictions on deposit and withdrawal activities due to regulatory non-compliance. The bank is now prohibited from issuing new loans. Customers are uncertain about when they will regain access to their funds.
RBI’s Action Based on Bank’s Liquidity Status
Considering the current liquidity crisis, RBI has instructed that no withdrawals be permitted from savings, current, or other accounts. However, exceptions have been made for essential expenses such as salaries, rent, and electricity bills.
Restrictions in Effect for Six Months
RBI will continue monitoring the bank’s financial status and may amend its directives to protect depositors’ interests. These restrictions will remain in place for six months, starting February 13, 2025.
Deposit Insurance Available Up to ₹5 Lakh
Eligible depositors can claim up to ₹5 lakh in deposit insurance under the Deposit Insurance and Credit Guarantee Corporation (DICGC). As of March 2024, the cooperative bank held deposits worth ₹2,436 crore.
Similar Cases: PMC Bank Scandal
In 2019, a similar scam involving Punjab & Maharashtra Cooperative (PMC) Bank led to severe restrictions by RBI. The central bank eventually converted PMC into a small finance bank.
False NPAs & Fake Deposits
PMC Bank had an actual NPA of 9%, but it falsely reported it as just 1%. The bank also showed ₹250 crore in fake deposits and issued large loans to NPA companies like DHFL and HDIL under the names of their directors’ relatives and associates.
This latest New India Cooperative Bank case has once again raised concerns about financial mismanagement in cooperative banks. With investigations ongoing, depositors and stakeholders await clarity on the future of the bank.
