₹122 crore discrepancy has been discovered during RBI Inspection at the New India Cooperative Bank branches in Mumbai.

Such severe financial irregularities raise questions about internal controls and governance within the banking institution.
Accounts Head confessed to embezzling funds.

The Events leading to discrepancy

The audit, conducted by RBI officials at the bank’s corporate office in Prabhadevi and its Goregaon branch, revealed a substantial shortfall between the physical cash present and the recorded amounts in the bank’s register. The anomaly was first detected during an inspection on February 12, when Deputy General Manager (DGM) Ravindran and another officer, Sanjay Kumar, arrived for a standard routine check.

The RBI Inspection and Discovery

According to a senior bank employee present during the audit, the RBI officials meticulously examined the safes at both the corporate office and the Goregaon branch. The bank’s safe, located on the third floor of the corporate office, was opened using keys obtained from bank employee Atul Mhatre. Meanwhile, another team of RBI officials inspected the Goregaon branch’s safe. After several hours of counting, the officials identified a considerable shortfall in cash.

The Confession

Following the discovery, the RBI officials summoned the bank’s senior employees to discuss the missing funds. The officials informed the staff about the Rs 122 crore cash discrepancy and additional shortages at the Goregaon branch. The gravity of the situation was emphasized, with warnings of serious consequences if the whereabouts of the missing funds were not disclosed.

Amidst the growing tension, Hitesh Mehta, the bank’s General Manager and Head of Accounts, was called for a private discussion with the RBI team. It was during this meeting that Mehta allegedly confessed to embezzling the funds, revealing that he had distributed the money to individuals known to him during the Covid-19 pandemic.

Legal Proceedings and Investigation

The Dadar Police initially registered a First Information Report (FIR) in the case, which was later transferred to the Economic Offences Wing (EOW) of the Mumbai Police for further investigation. On Saturday, EOW officials conducted a search at Mehta’s residence in Dahisar, resulting in his arrest.

The investigation is ongoing, with authorities closely scrutinizing Mehta’s actions and any potential involvement of other individuals in the embezzlement scheme. The case has raised concerns about the effectiveness of internal controls within banking institutions, especially during challenging times such as the Covid-19 pandemic.

Conclusion

The shocking discovery of the Rs 122 crore cash discrepancy at New India Cooperative Bank serves as a stark reminder of the importance of robust internal controls and vigilant oversight within financial institutions. As the investigation continues, it is crucial for the banking sector to reassess its governance frameworks to prevent such incidents from occurring in the future.

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