The Economic Offences Wing (EOW) of the Mumbai Police has intensified its investigation into the Rs.122 crore embezzlement at New India Cooperative Bank by summoning Abhijit Deshmukh, a chartered accountant from Sanjay Rane & Associates LLP, for questioning. Deshmukh audited the bank’s accounts between 2019 and 2021, during which the alleged misappropriation occurred.
The EOW’s decision to summon Deshmukh follows revelations that Hitesh Mehta, the bank’s former General Manager, had been siphoning funds since 2019. Mehta is accused of embezzling approximately Rs.122 crore from the bank’s vaults at its Prabhadevi head office and Goregaon branch.
Authorities are keen to understand how the audits conducted by Deshmukh did not detect the significant discrepancies. The EOW aims to determine whether standard auditing procedures were followed and if there were any lapses in oversight.
In addition to summoning Deshmukh, the EOW has recorded statements from Abhimanyu Bhuwan, who served as the bank’s Chief Executive Officer from 2019 to 2022. Investigators are examining the roles of senior management during the period when the fraud took place to identify any potential complicity or negligence.
The investigation has also uncovered a connection between Mehta and real estate developer Dharmesh Paun. Their association dates back to 2016 when Paun sold a property to Mehta. It is alleged that Mehta provided funds to Paun for a slum rehabilitation project in Charkop, which failed to secure a formal loan.
The fraud came to light after the Reserve Bank of India (RBI) conducted a surprise inspection at the bank’s headquarters on February 12, 2025. The inspection revealed a shortfall of Rs.112 crore at the Prabhadevi branch and an additional Rs.10 crore missing from the Goregaon branch’s safe.
In response to these findings, the RBI has taken decisive action to protect depositors’ interests. On February 14, 2025, the central bank superseded the board of New India Cooperative Bank for a period of 12 months. Shreekant, a former Chief General Manager of the State Bank of India, has been appointed as the administrator to manage the bank’s affairs. Additionally, a Committee of Advisors has been established to assist in the bank’s management.
The RBI has also imposed restrictions on the bank’s operations, including halting deposit withdrawals and barring the issuance of new loans. These measures aim to prevent further financial instability and safeguard the interests of the bank’s depositors.
As the investigation progresses, the EOW is considering conducting a polygraph test on Mehta, who has been evasive during questioning about the utilization of the embezzled funds. Authorities are also pursuing leads on other individuals who may have been involved or benefited from the misappropriated money.
The unfolding situation has understandably caused concern among the bank’s customers and stakeholders. The EOW and RBI are working collaboratively to ensure a thorough investigation and to implement measures that will restore confidence in the bank’s operations.
This case highlights the critical importance of robust internal controls and vigilant auditing practices within financial institutions. Ensuring transparency and accountability is essential to prevent such fraudulent activities and to maintain public trust in the banking system.
As more details emerge, the focus remains on holding those responsible accountable and on implementing reforms to prevent similar incidents in the future. The collaboration between regulatory bodies and law enforcement agencies is pivotal in addressing and resolving financial misconduct of this magnitude.
