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Mehta allegedly misused his position while overseeing the bank’s Dadar and Goregaon branches, siphoning off ₹122 crore from customer accounts. Authorities uncovered the fraud during an internal audit, leading to legal action against him.
Hitesh Mehta was arrested by the Mumbai police yesterday and was placed under arrest by the Economic Offences Wing (EOW) of the city police after being questioned for more than three hours. He was called to record his statement before the probe agency at its south Mumbai office in connection with the case registered against him and others.
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The Reserve Bank of India (RBI) on February 14 superseded the cooperative bank’s board for a year and appointed an administrator to manage its affairs. A day prior to that, it imposed several restrictions on the lender, including on the withdrawal of funds by depositors, citing supervisory concerns emanating from the recent material developments in the bank, and protecting the interest of its depositors.
Acting Chief Executive Officer of the bank, Devarshi Ghosh, lodged a complaint against Mehta and others at the Dadar police station in central Mumbai for alleged misappropriation of the bank’s funds. “Based on the complaint, the police registered a case in the wee hours of Saturday, which was then transferred to the EOW for investigation,” another official said.
As per the complaint, Mehta along with other associates hatched a conspiracy and embezzled ₹122 crore from the safes of Prabhadevi and Goregaon offices of the bank, he said. A case under the Bharatiya Nyaya Sanhita (BNS) sections 316 (5) (criminal breach of trust by public servants, bankers, and others in positions of trust), 61(2) (criminal conspiracy) was registered, he said.
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During the investigation, it came to light that the misappropriation of the funds had started soon after the COVID-19 pandemic broke out. While the accused embezzled Rs 112 crore from the safe in Prabhadevi, ₹10 crore was siphoned off from the Goregaon branch, he said.
New India Cooperative Bank has 28 branches and most of them are located in Mumbai, while two are in Surat in neighbouring Gujarat and one in Pune.