Mumbai police arrest ex-GM of New India Cooperative Bank in Rs 122 crore fraud case

The case against Mehta was registered two days after the Reserve Bank of India (RBI) imposed restrictions on the bank over alleged financial irregularities. Mehta was booked after Devarshi Shishir Kumar Ghosh, 48, the bank’s chief executive officer, filed a complaint against him, the police said.

In his police complaint, Ghosh said that Mehta and his accomplice (not named yet) were trusted employees of the bank and the cash in the bank’s vaults at its Prabhadevi and Goregaon offices was in their safe custody. But the two allegedly hatched a criminal conspiracy and embezzled about Rs 122 crore.

According to the complaint, the alleged scam took place between 2020 and 2025.

The EOW had recently received a complaint from the bank regarding the alleged financial irregularities. On Friday, the EOW officials recorded the statement of a senior bank official, filed an FIR at the Dadar police station, and then took over the investigation.

The FIR was filed under sections 316(5) (criminal breach of trust by a public servant or banker, merchant, broker, attorney or agent) and 61(2) (criminal conspiracy) of the Bharatiya Nyaya Sanhita (BNS).

On Friday, thousands of panic-stricken depositors had queued up before the branches of the bank seeking to know if their money was safe and could be withdrawn.

The RBI’s restrictions prevent the bank from issuing new loans, making investments, borrowing funds or allowing withdrawals for six months due to concerns over its financial stability. The RBI also superseded the bank’s board of directors for 12 months, citing “poor governance standards”.

The RBI has appointed Shreekant, a former chief general manager of the State Bank of India (SBI), as the administrator to manage the bank’s affairs. Additionally, a committee of advisors has been formed to assist him, the RBI said.

The RBI directed the loss-making bank not to grant or renew any loans and advances, make any investment, incur any liability including borrowing funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations without prior approval of RBI in writing.

The RBI restrictions came into effect after the close of business on February 13, and will be valid for six months.

New India Cooperative Bank has a network of 30 branches and a deposit base of Rs 2,436 crore as of March 2024. The bank had posted losses of Rs 22.78 crore in 2023-24 and Rs 30.74 crore in 2022-23.

This is the first major action against a cooperative bank in Maharashtra after the collapse of the Punjab and Maharashtra Co-operative (PMC) Bank due to large-scale fraudulent loans.