Mumbai: A Mumbai court has denied bail to Hitesh Mehta, the former general manager of New India Co-Operative Bank, accused of embezzling ₹122 crore over five years. The decision, following a Reserve Bank of India audit that uncovered massive cash discrepancies.
A Missing ₹122 Crore and a Trail of Discrepancies
What began as a ₹112-crore shortfall detected by Reserve Bank of India (RBI) auditors ballooned into a ₹122-crore scandal that has shaken one of Mumbai’s cooperative banks. The discrepancies—first spotted at the bank’s Prabhadevi and Goregaon branches—pointed to large sums missing from cash reserves, prompting an intensive probe into the institution’s internal controls.
The case took a decisive turn when investigators alleged that Hitesh Mehta, then general manager and head of accounts, orchestrated a systematic siphoning of funds. According to the chargesheet, Mehta and his associates are believed to have withdrawn and recirculated the bank’s cash through a network of insiders, disguising losses as routine transactions.
The Court’s Firm Stand on Bail
On October 18, Additional Chief Judicial Magistrate Abhijit R. Solapure of Mumbai’s Esplanade Court rejected Mehta’s bail plea, citing “serious offences involving huge amounts.” The court held that the magnitude of the alleged crime demanded a “thorough inspection of documents” to trace the money trail.
“There is ample evidence on record to show the accused’s involvement,” the order stated, noting that Mehta’s actions, as detailed in the chargesheet, included “taking cash and putting it into circulation by transferring it to other accused.” The court accepted the prosecution’s argument that releasing Mehta could jeopardize the ongoing forensic audit, as he might tamper with evidence or influence witnesses.
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The Defence’s Plea and Contested Evidence
Mehta’s counsel argued that his client had been coerced into signing an affidavit confessing to the alleged embezzlement on February 14, 2025, insisting the statement was involuntary and therefore inadmissible. The defence also challenged the legality of a lie-detector test conducted on Mehta, citing Supreme Court guidelines that prohibit such procedures without explicit consent.
Further, the lawyer questioned procedural lapses in the investigation, alleging “an unexplained delay in lodging the FIR” and claiming that the investigating officer “rushed” to file a chargesheet without sufficient corroboration. The court, however, dismissed these arguments, ruling that the investigation had been carried out “with proper details and due diligence.”
A Broader Warning for Cooperative Banks
The scandal, first exposed by an RBI inspection in February, has reignited debate over governance lapses in India’s cooperative banking network—institutions often burdened by weak oversight and insider influence. The New India Co-Operative Bank case, officials say, reflects systemic vulnerabilities that allow manipulation of cash balances and concealment of shortfalls for years before detection. Forensic auditors are still tracing the full extent of the diversion, with investigators suspecting a multi-layered scheme that blurred the line between administrative discretion and criminal conspiracy.
