MUMBAI: In a shocking revelation, the Economic Offences Wing (EOW) of Mumbai Police has uncovered a Rs 122 crore scam at the New India Co-operative Bank, leaving numerous account holders in distress. The scam, meticulously planned and executed by the bank’s former General Manager Hitesh Mehta, involved siphoning off funds over several years.

The EOW is intensifying its investigation to trace the missing funds and identify all those involved in the scam. The probe has revealed that both Hitesh Mehta and former CEO Abhimanyu Bhoan were aware of the fraud but are not cooperating with the investigation and were also arrested along with a developer Dharmesh Paun, who allegedly received Rs 70 crore from the loot. All three accused have been remanded in police custody till February 28.

The fraud came to light during a routine audit by the Reserve Bank of India (RBI), which detected a significant cash shortfall at the bank’s Prabhadevi and Goregaon branches. Mehta, along with other key individuals, allegedly withdrew large sums of money and laundered it through unidentified trusts. The funds were then transferred abroad via hawala operators.

The RBI has imposed restrictions on the bank, preventing account holders from withdrawing their money. This has led to long queues and frustration among depositors, many of whom are now left in financial limbo. 

In response to the crisis, the RBI also appointed Shreekant, a former Chief General Manager of the State Bank of India, as the administrator to oversee the bank’s operations during this period. Additionally, a Committee of Advisors has been established to assist in managing the bank’s affairs and to assist in the revival process.

The RBI’s intervention has led to restrictions on deposit withdrawals and the issuance of new loans, causing significant distress among the bank’s clientele. Many depositors, many of whom were old pensioners and those from the lower bracket of income, are now uncertain about the status of their savings, with concerns about the bank’s ability to return their funds.

The incident has prompted discussions within the government regarding the adequacy of deposit insurance coverage and it is reportedly looking to increase the current limit of Rs 5 lakh.