The Mumbai Police’s Economic Offences Wing (EOW) is conducting a probing into the embezzlement of ₹122 crore at the New India Cooperative Bank and has so far arrested three persons, including two former top executives of the lender.
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The Reserve Bank of India’s (RBI) inspection team visited the corporate office branch of the bank at Prabhadevi on February 11, where they found ₹122 crore cash was missing from the safe, an official said on Tuesday.
The balance sheet at the corporate office branch was showing ₹133.41 crore at the bank’s safe at Prabhadevi and Goregaon branches, and ₹122.028 crore was the figure on the balance sheet of Prabhadevi branch on that day, he said.
During the probe, the EOW found the capacity of the safe at the corporate office to store cash was only ₹10 crore, and they actually found ₹60 lakh in the vault. At the Goregaon branch safe, they found ₹10.53 crore cash on the day of the RBI inspection, according to the official.
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The vault at the Goregaon branch also had a capacity to store ₹10 crore. The EOW is now probing why auditors looking into the bank’s financial records did not raise an alarm over the missing cash from the bank, he said.
Various CA firms audited the balance sheets, daily reports and the books of cash in hand. It was their role to verify the cash, which was kept in the safe, he said.
Meanwhile, the EOW has summoned representatives of half-a-dozen firms which conducted audit of the fraud-hit lender at different times, another official said.
These financial services firms were involved in statutory, concurrent or internal audits during 2019-2024, the period when the alleged embezzlement took place, he said.
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As the initial audit of the lender was done by M/s Sanjay Rane Associates, a partner in the firm Abhijeet Deshmukh, is being quizzed by the EOW for the last four days. Now, the probe agency has summoned another partner in the chartered accountancy firm, Sanjay Rane, to record his statement, the official said.
Representatives of all auditing firms linked to the lender have been called from Wednesday onwards to record their statements, the official informed.
“If needed, the EOW will seek forensic audit of the bank’s financial records to ascertain how ₹122 crore was misappropriated,” he said.
Bank’s former CEO Abhimanyu Bhoan, who is among three persons arrested so far for the alleged fraud, had signed all audit reports and balance sheets of the bank, the official said.
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Bhoan was part of the conspiracy as he was aware how much cash was in the bank’s vaults, the official said.
Besides the former CEO, the bank’s ex-general manager Hitesh Mehta and real estate developer Dharmesh Paun have been arrested in the case. The alleged misappropriation of funds came to light following an inspection by the RBI.
As per the police, Devarshi Ghosh, the bank’s acting chief executive officer, lodged a complaint against Mehta and others at the Dadar police station in central Mumbai nearly two weeks ago for alleged misappropriation of the lender’s funds.
Based on the complaint, the police registered a case and the probe was transferred to the EOW.
The complainant alleged that Mehta and his associates hatched a conspiracy and embezzled ₹122 crore from the safes of Prabhadevi and Goregaon offices (in Mumbai) of the bank.
A case under sections 316 (5) (criminal breach of trust by public servants, bankers, and others in positions of trust) and 61(2) (criminal conspiracy) of the Bharatiya Nyaya Sanhita (BNS) has been registered.
The RBI has superseded the cooperative lender’s board for a year and appointed an administrator to manage its affairs.
