EOW: New India Co-op Bank stashed ₹133 crore in illegal cash hoard

EOW uncovers ₹133.41 crore cash irregularities at New India Cooperative Bank, linked to former GM Mehta, who allegedly siphoned off ₹122 crore.

Mumbai: The Economic Offences Wing (EOW) has uncovered financial irregularities at New India Cooperative Bank, where cash reserves far exceeded the bank’s authorised storage capacity. An investigation on Tuesday revealed that while the bank’s safes could officially hold only ₹20 crore, records showed it had accumulated a staggering ₹133.41 crore in cash.

Thane, India - February 15, 2025: New India cooperative bank account holders are seen outside the bank, after the RBI imposed restrictions, India, on Saturday, February 15, 2024. (Praful Gangurde /HT Photo)

The fraud came to light after a surprise inspection by the Reserve Bank of India (RBI) on February 12, which found ₹122.28 crore missing from the bank’s safes. A subsequent police probe revealed that Hitesh Pravinchand Mehta, 57, the former general manager and head of accounts, had allegedly siphoned off ₹122 crore (approximately $14.7 million USD) between 2020 and 2025. Mehta is suspected of exploiting his position to withdraw large sums over the years, a crime that was ultimately exposed through an internal audit.

“We found that the safe at the bank’s Prabhadevi main branch had a storage capacity of just ₹10 crore, while the Goregaon branch could store another ₹10 crore in ₹500 notes,” an EOW officer said. However, even after the RBI withdrew ₹2,000 notes from circulation in May 2023, the bank’s records continued to reflect ₹133.41 crore in cash holdings. When RBI officials inspected the safes, they found only ₹60 lakh at the Prabhadevi branch and ₹10.53 crore at the Goregaon branch—leaving a massive ₹122.28 crore unaccounted for.

According to official records, ₹112.59 crore should have been in the Prabhadevi branch and ₹22 crore in the Goregaon branch. “The cashier confirmed that each branch’s safes could hold only ₹10 crore at most, which raises serious questions about where the extra cash was stored,” the officer added.

During the investigation, Mehta allegedly admitted in a video confession to the RBI that he had been siphoning off cash since the COVID-19 pandemic. Historical records indicate that in March 2019, the Prabhadevi branch’s safes contained ₹33 crore, which surged to ₹99 crore by March 2020—figures that vastly exceeded the bank’s actual storage capacity. However, the actual cash physically available was significantly lower than what was documented in the bank’s books.

The EOW has arrested Mehta, along with builder Dharmesh Paun and CEO Abhimanyu Bhoan, in connection with the fraud. Investigators are also examining the role of Chartered Accountant Abhijeet Deshmukh, who audited the bank and granted it an A-grade certification. “The CEO was the authorised signatory on all audit reports,” the officer noted, suggesting possible collusion at multiple levels.

Authorities have summoned officials from several auditing firms that previously reviewed the bank’s accounts, including Sanjay Rane, U G Devi and Company, Gandhi and Associates LLP, Shinde Nayak and Associates, S I Mogul and Company, and Jain Tripathi and Company.

Meanwhile, the police have ordered a forensic audit to uncover the full extent of the fraud and track down the missing funds.