A ₹122 crore banking fraud has rocked the New India Co-operative Bank, leading to the arrest of Himesh Pravinchan Mehta, the bank’s former General Manager. The Economic Offenses Wing (EOW) of Mumbai Police took Mehta into custody on February 15 after an extensive interrogation, revealing financial irregularities that occurred between 2020 and 2025. The fraud came to light during an internal audit, which flagged discrepancies in financial records across multiple branches. Mehta is accused of misappropriating funds from the bank’s Dadar and Goregaon branches, exploiting his position to withdraw a massive sum illegally.
Read more on RBI’s action against New India Co-operative Bank
How the Fraud Was Uncovered
The scandal surfaced when the Chief Accounts Officer of the bank filed a complaint at the Dadar Police Station, prompting a deeper investigation. The audit findings revealed:
- ₹112 crore siphoned off from the Prabhadevi Treasury Safe
- ₹10 crore misappropriated from the Goregaon branch
Initially, the Dadar Police registered a case under multiple sections, including Section 409 (Criminal Breach of Trust by a Public Servant) and Section 420 (Cheating) of the Indian Penal Code (IPC). Later, the case was transferred to the Economic Offenses Wing (EOW) for a thorough investigation.
A forensic audit is now underway to assess the full scale of the fraud and uncover any additional financial irregularities.
RBI’s Swift Action Against the Bank
Following the revelations, the Reserve Bank of India (RBI) took strict action against the New India Co-operative Bank on February 14:
✅ The RBI superseded the bank’s board for 12 months and appointed an administrator.
✅ Restrictions were imposed on withdrawals for six months, triggering panic among depositors.
✅ The bank was barred from granting new loans, renewing advances, or making fresh investments.
✅ Essential expenses, such as employee salaries, rent, and electricity, were permitted to ensure stability.
The RBI appointed Sricon, a former Chief General Manager at State Bank of India (SBI), as the administrator, along with a committee of advisors to assist in managing the bank’s affairs.
Impact on Depositors & Government Response
The withdrawal restrictions affected over 1.3 lakh depositors, causing widespread concern among customers who rushed to bank branches to access their funds. However, the **RBI assured that 90% of depositors—those holding amounts under ₹5 lakh—are protected under the Deposit Insurance and Credit Guarantee Corporation (DICGC).
Meanwhile, the government is considering increasing the bank deposit insurance limit, recognizing the vulnerabilities exposed by the fraud.
Ongoing Investigation & Future Actions
Authorities continue to monitor the situation closely as forensic investigations progress. The Economic Offenses Wing is expected to identify other possible accomplices and trace additional misappropriated funds.
With RBI-imposed restrictions and administrative oversight, the future of the New India Co-operative Bank remains uncertain as the financial watchdogs work towards restoring depositor confidence and preventing similar frauds in the future.
Stay tuned for further updates as the investigation unfolds.