RBI Steps In: Central bank dissolves board, appoints administrator to stabilize operations.
Mumbai, India – February 15, 2025: The Economic Offences Wing (EOW) of Mumbai Police arrested Hitesh Mehta, General Manager of New India Cooperative Bank, on Saturday in connection with an alleged financial fraud amounting to Rs 122 crore. His arrest follows an in-depth probe into financial mismanagement at the bank.
RBI Intervenes to Safeguard Depositors
In response to growing concerns, the Reserve Bank of India (RBI) took swift action by dissolving the bank’s board of directors and appointing an administrator for a one-year term. On Friday, the RBI imposed stringent restrictions on financial transactions, including withdrawal limits for depositors. Citing governance lapses and financial instability, the central bank stated that these steps were necessary to protect the interests of account holders.
Police Investigation and Criminal Charges
Following a complaint filed by Acting Chief Executive Officer Devarshi Ghosh at the Dadar Police Station, an FIR was registered against Mehta and several associates. The complaint alleged that Mehta conspired with others to siphon off Rs 122 crore from the safes of the bank’s Prabhadevi and Goregaon branches.
Due to the scale of the fraud, the case was transferred to the EOW for further investigation. Mehta has been charged under the Bharatiya Nyaya Sanhita (BNS) sections 316(5) (criminal breach of trust by individuals in fiduciary positions) and 61(2) (criminal conspiracy). Authorities are actively investigating other potential accomplices.
Depositors Panic Amid Withdrawal Restrictions
The RBI’s intervention has caused anxiety among customers, with many rushing to the bank’s branches in an attempt to withdraw their money. However, due to the restrictions, depositors were unable to access their funds, leading to widespread frustration. New India Cooperative Bank operates 28 branches, with most located in Mumbai, along with two in Surat, Gujarat, and one in Pune.
Authorities are closely monitoring the situation to ensure financial stability and customer security. Meanwhile, Mehta remains in police custody as investigations continue into the large-scale financial misconduct.
