Banking regulator RBI’s officials are expected to be questioned soon by Mumbai Police’s Economic Offences Wing (EOW) in connection with the New India Cooperative Bank case, highly-placed sources told Moneycontrol on condition of anonymity.
The questioning - likely to take place in the coming weeks - may involve those who have inspected and given a clean chit to cooperative bank’s accounts, it is learnt.
The primary concern of the EOW is keen to find out what prompted Abhijit Deshmukh, the RBI-appointed auditor from Sanjay Rane and Associates to give a ‘A’ grade report, given that there were discrepancies regarding the cash in hand, sources told Moneycontrol on condition of anonymity.
Deshmukh had carried out the cooperative bank's audit from 2019 to 2021. Deshmukh was also recently appointed by the RBI to carry out an inquiry into the misappropriation of funds at the bank.
Emails sent to RBI and EOW remained unanswered till the publishing of the story, and will be updated once we have a response.
On February 14, 2025, RBI barred the bank from issuing new loans and suspended deposit withdrawals, along with superseding the board. Subsequently, RBI appointed an administrator and a committee of advisers to revive the bank and restore normal banking operations at the earliest.
RBI cited alleged misappropriation of funds by staff member behind its actions, which was reported by Moneycontrol on February 14. The Chief Compliance Officer of the co-operative likely filed a complaint with the EOW alleging misappropriation of funds by the bank staff, sources had told Moneycontrol, following a spot inspection by the central bank.
Later, on February 24, the RBI reconstituted the committee of advisers. "There is no change in the administrator. The Reserve Bank is closely monitoring the developments and shall continue to take necessary steps in the interest of the depositors of the bank," RBI said. The same day, RBI allowed depositors to withdraw up to Rs 25,000 with effect from February 27.
So far, EOW has arrested four people in the case so far.
The vault of New India Cooperative Bank's Prabhadevi branch in Mumbai had a capacity to hold only Rs 10 crore at a time, but the cash on book showed there was Rs 122 crore in the safe during RBI's inspection.
Prior to the RBI’s action on the New India Cooperative Bank, its former chairman Hiren Bhanu and wife Gauri Bhanu, have both reportedly fled from the country.
Mumbai Police's Economic Offences Wing (EOW) has arrested four accused in the case — former CEO Abhimanyu Bhoan, developer Dharmesh Paun, former general manager Manohar Arunachalam and head of accounts Hitesh Mehta.
On March 11, the Mumbai Police conducted a polygraph test, better known as a lie- detector test, on Mehta at a Forensic Science Laboratory, EOW officials told Moneycontrol. He was asked 50 questions and the test report is likely expected on March 17.
One of the accused, Unnanathan Arunachalam alias Arun Bhai, has been untraceable and Mumbai Police’s EOW has issued a Look Out Circular for him. Source also said EOW is in process of attaching the properties of the accused, especially Accounts Head Hitesh Mehta, and investigative officers are seeking permission of the court for the same.
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