Mumbai Police Registers Case in ₹122 Crore Fraud at New India Cooperative Bank
Mumbai Police Investigates ₹122 Crore Fraud at New India Cooperative Bank
In a shocking development, the Mumbai Police have registered a case against Hitesh Pravinchand Mehta, the former General Manager and Head of Accounts at New India Cooperative Bank, for allegedly embezzling a staggering Rs 122 crore from the bank’s funds. The fraud, which has raised serious concerns within the banking sector, has led to the Reserve Bank of India (RBI) intervening by superseding the bank’s board and suspending its operations.
Case Filed After Complaints from Bank CEO
The investigation began when the acting CEO of New India Cooperative Bank, Devarshi Ghosh, approached Dadar Police Station in central Mumbai to file a complaint regarding the misappropriation of funds. According to the police report, Mehta, along with his associates, is believed to have orchestrated a conspiracy to embezzle Rs 122 crore from the safes at the bank’s Prabhadevi and Goregaon offices.
The case, based on Ghosh’s complaint, was registered under sections 316 (5) (criminal breach of trust by public servants and bankers) and 61(2) (criminal conspiracy) of the Bharatiya Nyaya Sanhita (BNS). Given the scale of the alleged crime, the case was subsequently transferred to the Economic Offenses Wing (EOW), which has launched a thorough investigation into the matter.
RBI Takes Strict Action Against the Bank
In response to the growing concerns regarding the financial instability at New India Cooperative Bank, the Reserve Bank of India took decisive action by superseding the bank’s board and imposing severe restrictions on its operations. Effective from the close of business on Thursday, the RBI banned the bank from granting or renewing loans, accepting fresh deposits, or incurring liabilities in any form. The bank was also prohibited from making investments or disbursing payments of any kind, including the settlement of existing obligations.
The RBI’s stringent measures also included barring the bank from selling or transferring any assets, as well as preventing it from entering into any compromise or arrangement.
Public Panic and Chaos at Bank Branches
Following the RBI’s intervention, panic ensued among the customers of New India Cooperative Bank. Many customers flocked to the bank’s branches in a bid to access their accounts and retrieve their deposits. While some customers were able to access their lockers, all attempts to withdraw funds were rejected, with signs posted outside the branches warning that deposits would only be refunded after a 90-day period.
To maintain law and order amidst the rising chaos, Mumbai Police were deployed to various branches to manage the growing crowds and ensure that the situation did not escalate further. Many bank customers expressed frustration and concern over their frozen funds, with some accusing the bank’s management of failing to inform them in advance about the restrictions imposed by the RBI.
Investigating the Role of Hitesh Mehta and Associates
The police investigation into the fraud case is now focused on uncovering the full extent of the conspiracy. Hitesh Mehta, who held a key position at New India Cooperative Bank as the General Manager and Head of Accounts, is at the center of the probe. Authorities are working to determine whether Mehta acted alone or was part of a larger network that facilitated the misappropriation of funds.
The police believe that Mehta, along with other associates, may have exploited their positions of trust within the bank to embezzle the money. As the investigation progresses, more individuals are expected to be questioned, and additional charges could be brought against those involved.
Impact on the Banking Sector
This incident raises significant concerns about the internal checks and balances in cooperative banks, particularly in cases involving individuals in trusted positions. The fraud has also highlighted potential vulnerabilities in the management of cooperative banks, which serve a large section of the population, especially in urban and rural areas.
The actions taken by the RBI, although necessary, have caused considerable inconvenience to the customers of New India Cooperative Bank. The suspension of operations has not only affected the bank’s ability to conduct business but has also eroded public trust in cooperative banking institutions.
The Road Ahead: What Does the Future Hold?
As investigations continue, the future of New India Cooperative Bank hangs in the balance. The bank will likely face significant challenges in regaining customer trust and restoring normalcy to its operations. Customers who have been affected by the suspension of services will need to wait for the resolution of the ongoing investigation and the eventual repayment of their funds, which is expected to take up to 90 days.
In the meantime, the case against Hitesh Mehta and his associates will continue to unfold, and more information is expected to emerge about how the alleged fraud was carried out. For now, the banking community and the public will closely watch as the legal proceedings advance.