According to officials on Saturday, the general manager and head of accounts of the New India Cooperative Bank, along with his collaborators, have been charged by the Mumbai police with embezzling ₹122 crore. According to an official, the matter has been forwarded to the city police's Economic Offences Wing (EOW) for additional investigation. In order to safeguard the interests of its depositors and address supervisory concerns raised by the bank's recent material developments, the Reserve Bank of India (RBI) placed a number of limitations on the cooperative bank on Thursday, including a block on depositors' ability to withdraw money.
The RBI appointed an administrator to oversee operations and a team of advisors to support him after replacing the lender's board on Friday for a one-year term.According to a police officer, "Acting Chief Executive Officer of the bank, Devarshi Ghosh, on Friday approached the Dadar police station in central Mumbai and lodged a complaint of misappropriation of funds."
"As per the complaint, the bank's general manager and head of accounts, Hitesh Mehta, along with other associates hatched a conspiracy and embezzled ₹122 crore from the money kept in the safes of Prabhadevi and Goregaon offices of the bank," according to him.
The complaint led to the registration of a case against Mehta and others under sections 316(5) (criminal breach of trust by public workers, bankers, and others in positions of trust) and 61(2) (criminal conspiracy) of the Bharatiya Nyaya Sanhita (BNS), he added. Given the extent of the inquiry, the matter was subsequently moved to the EOW, he said, adding that the agency has launched a probe.
This cooperative bank has 28 branches, the most of which are in the metropolis of Mumbai. It also has two branches in Surat, Gujarat, which is nearby, and one in Pune. Customers were terrified by the RBI's action against the bank and flocked to its branches since Friday morning in an attempt to access their savings but were turned away.
RBI's action against the Co-operative Bank of New India
Due to inadequate governance standards and irregularities in its lending business, the Reserve Bank of India (RBI) on Friday, February 14, replaced the board of the New India Co-operative Bank, based in Maharashtra, for a period of 12 months, one day after imposing various restrictions. For six months, the RBI has prohibited depositors and account holders from taking money out of the lender.
The RBI has designated Shreekant, a former Chief General Manager of the State Bank of India (SBI), as the administrator to oversee the operations of New India Co-operative Bank, the official announcement said.
A 'Committee of Advisors' has also been created by the central bank to help the Administrator carry out his responsibilities. Former SBI General Manager Ravindra Sapra and chartered accountant Abhijeet Deshmukh are members of the Committee of Advisors.
"Due to certain material concerns emanating from poor governance standards observed" in the bank with its headquarters in Mumbai, the action was required. The RBI's'spot examination' of the bank's books revealed several shortcomings, which prompted the CCO to approach the Mumbai Police's Economic Offence Wing.
Reports state that the problem relates to certain bank employees embezzling money. The RBI banned the bank from making new loans on Thursday, halted deposit withdrawals, and replaced the bank's board on Friday due to poor management.
The limitations are subject to revision, will be in effect for six months, and went into effect at the end of business on Thursday. "Considering the bank's present liquidity position, the bank has been directed not to allow withdrawal of any amount from savings bank or current accounts or any other account of a depositor," the RBI stated at the time.
Subject to the restrictions outlined in the RBI guidelines, the lender is permitted to deduct loans from deposits.
RBI's action against the Co-operative Bank of New India
Due to inadequate governance standards and irregularities in its lending business, the Reserve Bank of India (RBI) on Friday, February 14, replaced the board of the New India Co-operative Bank, based in Maharashtra, for a period of 12 months, one day after imposing various restrictions. For six months, the RBI has prohibited depositors and account holders from taking money out of the lender.
The RBI has designated Shreekant, a former Chief General Manager of the State Bank of India (SBI), as the administrator to oversee the operations of New India Co-operative Bank, the official announcement said.
A 'Committee of Advisors' has also been created by the central bank to help the Administrator carry out his responsibilities. Former SBI General Manager Ravindra Sapra and chartered accountant Abhijeet Deshmukh are members of the Committee of Advisors.
"Due to certain material concerns emanating from poor governance standards observed" in the bank with its headquarters in Mumbai, the action was required. The RBI's'spot examination' of the bank's books revealed several shortcomings, which prompted the CCO to approach the Mumbai Police's Economic Offence Wing.
Reports state that the problem relates to certain bank employees embezzling money. The RBI banned the bank from making new loans on Thursday, halted deposit withdrawals, and replaced the bank's board on Friday due to poor management.
The limitations are subject to revision, will be in effect for six months, and went into effect at the end of business on Thursday. "Considering the bank's present liquidity position, the bank has been directed not to allow withdrawal of any amount from savings bank or current accounts or any other account of a depositor," the RBI stated at the time.
Subject to the restrictions outlined in the RBI guidelines, the lender is permitted to deduct loans from deposits.
According to the RBI, the bank would not be allowed to extend or renew any loans and advances, make any investments, or take on any liabilities, including accepting new deposits, after business closes on February 13 without first obtaining permission. It stated that in order to safeguard the interests of bank depositors and address supervisory concerns arising from recent developments in the bank, the directives were necessary.
More than 90% of the 1.3 lakh depositors of the city-based bank reportedly have up to ₹5 lakh in their accounts and would be able to access their full amount under deposit insurance. On Thursday, the chief compliance officer (CCO) of the bank went to the Mumbai Police's Economic Offence Wing after learning about certain shortcomings in a 'spot inspection' of its books by RBI.
More than 90% of the 1.3 lakh depositors of the city-based bank reportedly have up to ₹5 lakh in their accounts and would be able to access their full amount under deposit insurance. On Thursday, the chief compliance officer (CCO) of the bank went to the Mumbai Police's Economic Offence Wing after learning about certain shortcomings in a 'spot inspection' of its books by RBI.
The bank operated 28 branches as of March 2024. As of March 31, 2024, its total assets dropped to ₹1,175 crore from ₹1,330 crore at the same period last year, and the gross non-performing assets ratio rose to over 7.96%. The majority of the bank's 28 branches are found in the metropolis of Mumbai; it also has branches in Pune and Surat, Gujarat, which are nearby.
The total deposit base at the end of FY24 was ₹2,436 crore, up slightly from ₹2,406 crore during the same period last year. The bank's annual report states that term deposits make up more than two-thirds of the total deposits. In 1968, employees of a state-run general insurer with a similar name founded the bank.
The total deposit base at the end of FY24 was ₹2,436 crore, up slightly from ₹2,406 crore during the same period last year. The bank's annual report states that term deposits make up more than two-thirds of the total deposits. In 1968, employees of a state-run general insurer with a similar name founded the bank.
0 Comments