New India Co-operative Bank Row: EOW Arrests Former GM Hitesh Mehta For Alleged ₹122 Crore Fraud

New Delhi: The Economic Offences Wing (EOW) on Saturday arrested Hitesh Pravinchand Mehta, former General Manager of New India Co-operative Bank Limited, for his alleged involvement in the embezzlement of ₹122 crore. Mehta, who served as the General Manager of Dadar New India Bank, was set to retire in 2026.  

Mehta was arrested following an interrogation. Between 2020 and 2025, Hitesh Pravinchand Mehta allegedly misappropriated ₹122 crore from the accounts of two branches of New India Co-operative Bank—Dadar and Goregaon.

The Economic Offences Wing (EOW) of the Mumbai Police uncovered the financial irregularities during an audit, revealing a discrepancy of ₹122 crore in the bank’s books. Following this, the EOW issued a summons to Mehta for further investigation. 

RBI Cracks Down on New India Co-operative Bank Over Alleged Fund Misappropriation

The Reserve Bank of India (RBI) has taken stringent action against New India Co-operative Bank following alleged financial misappropriation by some of its staff, sources said on Friday. The central bank’s intervention comes after a 'spot inspection' of the bank’s books revealed significant lapses.

According to sources, the bank’s Chief Compliance Officer (CCO) approached the Mumbai Police’s Economic Offences Wing (EOW) on Thursday after discovering discrepancies during the RBI’s inspection. However, the total amount misappropriated and the identities of those involved have not been disclosed.

RBI’s Response and Depositor Concerns

On Thursday, the RBI imposed strict restrictions on the bank, barring it from issuing new loans and suspending deposit withdrawals for six months. A day later, it superseded the Board of Directors due to mismanagement, appointing an administrator and a Committee of Advisors to oversee the bank’s revival and restore normal operations.

The newly appointed administrator, Shreekant, a former Chief General Manager of the State Bank of India ( SBI ), will be assisted by advisors Ravindra Sapra (former General Manager, SBI) and Abhijeet Deshmukh (Chartered Accountant). The board will remain superseded for 12 months.

Despite the crisis, sources indicate that over 90% of the bank’s 1.3 lakh depositors have accounts with balances up to ₹5 lakh. These deposits are covered by the Deposit Insurance and Credit Guarantee Corporation, ensuring that if the bank goes into liquidation, these account holders will receive their funds.

Bank’s Financial Standing and Customer Reaction

As of March 2024, the bank operated 28 branches, primarily in Mumbai. Its total assets declined to ₹1,175 crore from ₹1,330 crore the previous year, while its gross non-performing assets (NPA) ratio surged to 7.96%. The deposit base, however, saw a marginal rise from ₹2,406 crore in FY23 to ₹2,436 crore in FY24, with over two-thirds being term deposits.

The RBI’s restrictions led to panic among depositors, with many rushing to the bank’s branches on Friday seeking clarity on their funds.

A Unique Legacy in the Co-operative Banking Sector

Founded in 1968 by employees of a state-run general insurance company, New India Co-operative Bank differs from many co-operative banks as it does not have ties to any particular community or political affiliations. The RBI justified its intervention, stating that the action was “necessitated due to certain material concerns emanating from poor governance standards observed in the bank.”

Meanwhile, the Rs 122-crore fraud has shocked the banking sector, raising concerns over internal controls and oversight at co-operative banks. The investigation is ongoing, and the EOW has vowed to vigorously pursue the case to bring the culprits to justice.