In a significant development in the New India Co-operative Bank embezzlement case, a court has denied bail to Hitesh Mehta, the primary accused in the alleged Rs 122-crore fraud. Mehta, who served as the bank's general manager and head of accounts, is at the center of accusations involving the misappropriation of substantial funds from the bank's reserves over a five-year period.

Key Details of the Case

Court's Reasoning

The court cited several factors in its decision to deny bail:

1. Severity of Allegations: The court emphasized the serious nature of the accusations against Mehta.
2. Scale of Embezzlement: The substantial amount of Rs 122.00 crore involved in the case was a key consideration.
3. Risk of Evidence Tampering: Concerns were raised about the possibility of Mehta interfering with evidence if released.
4. Ongoing Forensic Audit: The court noted that Mehta's release might impede the ongoing forensic audit.

Case Background

The fraudulent activities came to light following a Reserve Bank of India (RBI) inspection at the bank's Prabhadevi office in February. Initially, the inspection revealed a cash shortfall of Rs 112.00 crore, which later escalated to Rs 122.00 crore missing from custody. The discrepancies were not limited to one location, as irregularities were also detected at the bank's Goregaon branch.

Mehta's Alleged Role

According to the court's observations, Mehta played a crucial role in the embezzlement scheme. He is accused of:

1. Withdrawing cash from the bank
2. Circulating the misappropriated funds
3. Transferring money to other accused individuals

The court's decision underscores the gravity of the allegations and the potential impact on the ongoing investigation into this significant banking fraud case.

The Reserve Bank of India (RBI) has approved the voluntary amalgamation of New India Co-operative Bank Ltd, Mumbai, with Saraswat Co-operative Bank Ltd, Mumbai. This significant move in the co-operative banking sector is set to take effect from August 4, 2025.

Merger Details

Under the terms of the merger:

• All 27 branches of New India Co-operative Bank will continue to operate
• These branches will function as part of Saraswat Co-operative Bank
• The transition aims to minimize disruption to banking services for existing customers of New India Co-operative Bank

Background of Regulatory Scrutiny

The merger follows regulatory challenges faced by New India Co-operative Bank:

• In February 2025, the bank came under RBI's regulatory scanner due to allegations of a ₹122.00 crore embezzlement case involving top management members
• On February 14, 2025, the RBI superseded the bank's board and appointed an administrator for a one-year term
• The RBI imposed restrictions, including limits on depositor withdrawals, to safeguard depositor interests

Financial Position

As of March 2025, New India Co-operative Bank's financial position stood as follows:

Implications of the Merger

The amalgamation is expected to:

• Bring stability to New India Co-operative Bank's operations
• Protect the interests of its depositors
• Ensure continuity of banking services
• Restore confidence among stakeholders

The RBI's approval of this merger underscores the regulator's commitment to maintaining the health of the co-operative banking sector and protecting depositor interests. As the merger date approaches, customers of New India Co-operative Bank can expect further communications regarding the transition of their accounts and services to Saraswat Co-operative Bank.