New India Co-operative Bank Scam: Mumbai’s New India Co-operative Bank Limited has been rocked by a major financial scandal, with former general manager Hitesh Pravinchand Mehta at the center of a massive embezzlement case. Mehta has been accused of misusing his position to siphon off a staggering Rs 122 crore from the bank’s Dadar and Goregaon branches. The fraudulent activities allegedly took place during his tenure as general manager, raising serious concerns about internal governance and oversight within the bank.
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FIR Filed, Investigation Underway
The case came to light after the bank’s Chief Accounts Officer lodged a formal complaint with the Dadar Police. Following the complaint, the police registered an FIR, citing that the misappropriation occurred between 2020 and 2025. Authorities suspect that Mehta was not acting alone and that another person might have been involved in the scam. Given the gravity of the allegations, the case has been handed over to the Economic Offenses Wing (EOW) for an in-depth probe into the financial irregularities.
Legal Action Under IPC Sections
Dadar Police have booked the accused under sections 316(5) and 61(2) of the Indian Penal Code (BNS). These sections pertain to financial fraud and criminal breach of trust. The EOW is expected to scrutinize the transaction history, internal audit reports, and regulatory lapses that may have facilitated the fraud. The investigation aims to uncover the modus operandi of the accused, identify other possible accomplices, and determine whether the bank’s internal mechanisms failed to detect the scam in time.
RBI Imposes Stringent Restrictions on the Bank
In response to the scandal, the Reserve Bank of India (RBI) has imposed severe restrictions on the New India Co-operative Bank to safeguard depositors’ interests. As per the RBI directive issued on February 13, 2025, the bank has been barred from issuing new loans, renewing existing ones, accepting fresh deposits, or making any investments. Additionally, the bank cannot disburse payments for liabilities or sell its assets without prior RBI approval.
The RBI, in its official statement, stated that these measures are crucial to stabilizing the bank and preventing further financial mishaps. The restrictions will remain in force for six months, subject to review based on the bank’s financial recovery and compliance with regulatory requirements.
Concerns Over Banking Oversight and Security
This fraud has raised serious concerns regarding the oversight mechanisms of cooperative banks in India. Financial experts believe that regulatory gaps and inadequate supervision often allow such scams to occur. Questions are now being raised about whether the bank adhered to standard security protocols and risk management measures. The EOW’s investigation is expected to shed light on whether there was negligence on the part of the bank’s management or systemic failures that enabled the fraud.
What Lies Ahead?
As the investigation progresses, authorities will determine the extent of the fraud and hold accountable those responsible. The findings could lead to more stringent regulations for cooperative banks to prevent future financial mismanagement. Meanwhile, depositors of New India Co-operative Bank remain uncertain about the fate of their savings, anxiously awaiting further updates from authorities.
The case serves as a stark reminder of the vulnerabilities within the banking sector and underscores the need for robust governance, transparency, and accountability in financial institutions.
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