New India Co-op Bank: RBI uncovers massive fraud of Rs 122 crore; know what’s the case

The Reserve Bank of India (RBI) has uncovered a massive scam of Rs 122 crore at the New India Cooperative Bank. The fraud came to light after the RBI conducted an inspection at the Mumbai-based bank. Meanwhile, the bank’s general manager has been arrested in connection with the case and sent to police custody until Friday.

RBI audit
The RBI conducted an audit at the New India Co-op Bank’s head office in Prabhadevi and Goregaon branch. Probing officials discovered a discrepancy of Rs 112 crore at the bank’s head office and another of Rs 10 crore at the Goregaon branch, reports say. After that, RBI officials began questioning the bank’s employees regarding the missing amount.

Confession
Later on the day of the audit, Hitesh Mehta, the general manager and head of accounts at the New India Co-op Bank, went to meet RBI officials and allegedly confessed to his involvement in the scam. He said he began siphoning off cash during the COVID-19 pandemic. Mehta, 57, has since been arrested by the Economic Offences Wing (EOW) of the Mumbai Police and sent to police custody until Friday (February 21). Dharmesh Poun, a developer who allegedly received Rs 70 crore of the embezzled funds, has also been apprehended, NDTV reported.

Restrictions on bank
In view of the fraud, the RBI, on Friday, superseded the board of the New India Co-op Bank for one year and appointed a new administrator to oversee bank’s affairs through this period. The central bank had earlier placed various restrictions on the bank, including a bar on new despits, withdrawals, and fresh loans. The bank is, however, allowed to incur expenditure on essential items such as staff salaries, rent, and electricity bills.