Massive Fund Misappropriation Unearthed
The general manager and head of accounts at New India Cooperative Bank, Hitesh Pravinchand Mehta, has been arrested for allegedly misappropriating ₹122 crore from the bank’s Prabhadevi and Goregaon branches. A Mumbai holiday court remanded Mehta, 57, to police custody until February 21. Reports suggest that Mehta confessed to siphoning off cash from the bank’s safes since the COVID-19 pandemic. His alleged actions have triggered a major regulatory crackdown by the Reserve Bank of India (RBI).
How the Fraud Came to Light
The massive financial irregularity surfaced on Wednesday when an RBI audit team visited the Prabhadevi head office of the New India Cooperative Bank for an inspection. As part of the audit process, senior bank officials, including Hitesh Mehta, were summoned to provide access to the bank’s safe. During the inspection, auditors discovered a staggering ₹112 crore missing from the Prabhadevi branch, and further scrutiny revealed another ₹10 crore unaccounted for from the Goregaon branch, bringing the total to ₹122 crore.
Upon questioning, none of the bank employees could explain the missing funds. Later that evening, Hitesh Mehta reportedly met with RBI officials and admitted to taking the cash over time. Following this revelation, the police registered a case against him and unidentified accomplices under Sections 316 (5) (criminal breach of trust by a public servant) and 61 (2) (criminal conspiracy) of the Bhartiya Nyaya Sanhita, 2023.
RBI’s Response and Regulatory Measures
In response to the fraudulent activity, the RBI swiftly imposed restrictions on the New India Cooperative Bank, limiting depositors’ ability to withdraw funds. The central bank cited supervisory concerns and the need to safeguard depositors’ interests as reasons for these measures. Additionally, the RBI took the drastic step of dissolving the bank’s board for a period of one year and appointing an administrator to oversee its operations. These steps aim to stabilize the institution while authorities continue their investigation into the fraud case.
As the probe progresses, law enforcement agencies are expected to identify potential accomplices and trace the diverted funds. The incident has raised serious concerns regarding internal controls and regulatory oversight in cooperative banks, prompting calls for stricter financial governance measures.
