New India bank scam: Realtor who got ₹70 crore from loot arrested

The alleged scam came to light during the audit at the bank’s headquarters in Prabhadevi on Wednesday

Mumbai: Mumbai police’s Economic Offences Wing (EOW) on Sunday arrested Dharmesh Paun, a private developer from Kandivali, in connection with the ₹122-crore New India Cooperative Bank scam. Paun allegedly received ₹70 crore from the bank’s general manager and account head Hitesh Mehta, who was arrested on Saturday, for investment purposes, said police.

Both accused were produced at the Esplanade court on Sunday. (Anshuman Poyrekar/ HT)

Both Paun and Mehta were produced at the Esplanade court on Sunday and remanded in police custody till February 21.

The alleged scam came to light during the audit at the bank’s headquarters in Prabhadevi on Wednesday, when RBI officials found ₹122 crore missing from the vault. Later that evening, Mehta, an employee of the bank since 1988 due to retire next year, met RBI officials and confessed that he had been siphoning off cash from the bank’s Prabhadevi and Goregaon branches, which have vaults, since the pandemic. He also gave in writing to RBI officials that he gave the stolen amounts for investment purposes to people he knew.

While the EOW arrested Mehta on Saturday, its probe revealed that he gave around ₹70 crore to Paun, through whom he had bought a flat several years ago. He also gave money to a third accused in the case, identified as Unnanathan Arunachalam alias Arunbhai, who is absconding.

“Since the pandemic, Mehta has invested around ₹70 crore in Paun’s real estate firm. In the last transaction in January this year, he gave ₹59 lakh, and before that, in mid-2024, he gave ₹1.75 crore,” a police officer told HT.

Mehta likely invested another ₹40 crore with Arunbhai, an electric contractor, the officer added.

At the Esplanade court on Sunday, the public prosecutor said the EOW needs Mehta and Paun’s remand to find out if any other accomplices from the bank or outside were involved in the scam. The siphoned amounts were deposited by large numbers of people and the public was affected by the scam, so the matter needed to be thoroughly investigated, the prosecutor told the court.

Earlier, on Thursday, the Reserve Bank of India (RBI) notified that the bank “shall not, without prior approval of RBI in writing, grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits and disburse or agree to disburse any payment”.

In another statement on Friday, the RBI said it had taken over the operations of New India Co-operative Bank superseding its board of directors and appointed Shreekant, former chief general manager of State Bank of India, as an administrator for a period of 12 months.