Mumbai.
The Economic Offences Wing (EOW) of the Mumbai Police has detained Hitesh Pravinchand Mehta, the former General Manager of New India Co-operative Bank Limited, in connection with a massive ₹122 crore embezzlement scandal. The financial fraud, which reportedly took place between 2020 and 2025, was uncovered following an audit of the bank’s financial records, revealing severe irregularities in the accounts of the bank’s Dadar and Goregaon branches.
Mehta was detained following an investigation conducted at Aryavrat Society and was subsequently taken to the EOW office for further interrogation. Authorities suspect that the former general manager played a key role in siphoning off funds, leading to severe financial distress for the bank.
Massive Impact on Depositors and Financial Stability
The New India Co-operative Bank, which has been operating since 1968, primarily serves small depositors, and over 90% of its 1.3 lakh customers hold accounts with balances up to ₹5 lakh. These deposits are protected under the Deposit Insurance and Credit Guarantee Corporation (DICGC), ensuring that in case of liquidation, depositors will receive their insured amounts. However, the bank’s overall financial health has deteriorated in recent years, raising concerns over its long-term sustainability.
According to financial reports, as of March 2024, the bank operated 28 branches, primarily in Mumbai. The institution’s total assets declined sharply, dropping from ₹1,330 crore in the previous financial year to ₹1,175 crore. Additionally, the bank’s gross non-performing assets (NPA) ratio surged to 7.96%, signaling deep financial distress. Despite these alarming figures, the bank’s deposit base saw a marginal rise, increasing from ₹2,406 crore in FY23 to ₹2,436 crore in FY24, with a majority of these being term deposits.
EOW Investigation and RBI’s Intervention
The EOW’s probe into the bank’s financial records unearthed discrepancies amounting to ₹122 crore, prompting authorities to issue a summons for Hitesh Mehta. The Reserve Bank of India (RBI) swiftly intervened, stating that its action was “necessitated due to certain material concerns emanating from poor governance standards observed in the bank.”
In response to the unfolding crisis, the RBI superseded the bank’s board for 12 months and appointed Shreekant, a former Chief General Manager of the State Bank of India (SBI), as the new administrator. To restore stability, he will be assisted by Ravindra Sapra, former General Manager of SBI, and Abhijeet Deshmukh, a Chartered Accountant.
Background of New India Co-operative Bank
Founded in 1968, the New India Co-operative Bank was originally established by employees of a state-run general insurance company. Unlike many co-operative banks in India, it does not have any political or community-based affiliations. Over the years, it has grown into a significant player in the co-operative banking sector, catering to a diverse range of customers. However, poor management practices and financial misappropriation have now put its credibility under scrutiny.
Future Course of Action
With Mehta now in custody, the EOW investigation is expected to widen, as authorities look into other potential collaborators in the financial fraud. Officials are also examining whether more individuals within the bank’s administration were complicit in the scheme. Given the scale of the financial mismanagement, additional arrests could follow.
Meanwhile, the RBI’s intervention aims to restore depositor confidence and stabilize the bank’s operations. However, financial analysts warn that if further irregularities emerge, the bank could face liquidation, leaving thousands of customers in financial distress.
The developments surrounding the New India Co-operative Bank scam have once again raised concerns about the governance and oversight of co-operative banks in India, highlighting the need for stricter financial regulations and better monitoring mechanisms to prevent similar frauds in the future.
The post New India Co-operative Bank Scam: Former GM Hitesh Mehta Detained for ₹122 Crore Embezzlement appeared first on Global Governance News- Asia's First Bilingual News portal for Global News and Updates.
