Sat Feb 15 15:32:06 UTC 2025: ## Mumbai Police File Case Against Former New India Co-op Bank Manager for ₹122 Crore Embezzlement
**Mumbai, India** – The Mumbai Police have filed a case against Hitesh Mehta, the former general manager and head of the accounts department at the New India Co-operative Bank, for allegedly embezzling ₹122 crore (approximately US$14.7 million) from the bank’s Prabhadevi and Goregaon branches. Mehta is accused of working with an accomplice to carry out the fraud. The case has been transferred to the Mumbai Police’s Economic Offences Wing (EOW). Charges under Section 316(5) and 61(2) of the Code 2023 have been filed against Mehta.
This development follows the Reserve Bank of India’s (RBI) decision on Friday to remove the New India Co-operative Bank’s board for a period of 12 months due to non-compliance with regulations. On Thursday, January 13th, the RBI imposed restrictions on deposits and withdrawals at the bank, also halting new loan disbursements, citing regulatory non-compliance and the bank’s current cash position. Account holders are uncertain about when they will be able to access their funds.
While the RBI has restricted withdrawals, exceptions are made for essential expenses such as salaries, rent, and utility bills. The RBI will continue to monitor the bank’s situation and modify these restrictions as needed to protect depositors’ interests. These restrictions will remain in effect for six months, until February 13th, 2025. Eligible depositors can claim up to ₹5 lakh (approximately US$60,000) from the Deposit Insurance and Credit Guarantee Corporation. As of the end of March 2024, the cooperative bank held ₹2436 crore in deposits.
This situation echoes the 2019 PMC Bank scandal, where the RBI also dissolved the board of directors and imposed restrictions following the discovery of massive fraud. The RBI subsequently decided to operate the PMC Bank as a small finance bank. Reports suggest that PMC Bank had concealed its actual Non-Performing Asset (NPA) rate of 9%, reporting only 1%, and had also shown ₹250 crore in fictitious deposits. The bank had extended substantial loans to companies like DHFL and HDIL, often through relatives or associates of these companies’ directors, inflating its loan book with falsified deposits.
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