A Mumbai court has remanded Hitesh Mehta and Dharmesh Paun, the accused in the New India Cooperative Bank scam, to police custody until February 21. The two were presented before a holiday court in Mumbai following their arrests by the Economic Offences Wing (EOW) of the Mumbai Police.
Mehta, the former general manager of the bank, is accused of masterminding a scheme that allegedly embezzled Rs 122 crore from customer accounts at the Dadar and Goregaon branches. The scam, which reportedly began around the onset of the COVID-19 pandemic, saw Rs 112 crore misappropriated from the Prabhadevi branch and Rs 10 crore from Goregaon. According to the complaint, the fraudulent activity occurred between 2020 and 2025.
The investigation against Mehta began just days after the Reserve Bank of India (RBI) imposed restrictions on the bank over suspected financial irregularities. The action followed a complaint filed by Devarshi Shishir Kumar Ghosh, the bank’s CEO, who raised concerns about discrepancies uncovered in an internal audit, which triggered the police investigation.
An FIR has been filed against Mehta, including charges of criminal breach of trust and conspiracy under the Bharatiya Nyaya Sanhita.
On February 14, the RBI imposed stringent restrictions on the bank’s operations due to its financial instability. These restrictions include barring withdrawals and appointing an administrator for one year. As a result, anxious customers have been flocking to bank branches to inquire about the safety of their deposits. On Friday, thousands of depositors queued outside the bank seeking answers on whether their funds were secure and available for withdrawal.
Additionally, the RBI’s measures prevent the bank from issuing new loans, making investments, borrowing funds, or allowing withdrawals for six months. The central bank also replaced the bank’s board of directors for 12 months, citing “poor governance standards.”