New India bank fraud: Over 2k defaulted loans under lens

The crisis-hit New India Cooperative Bank had advanced over 2,000 loans to borrowers which were later settled for miniscule amounts, swelling its non-performing assets to around ₹400 crore, investigators from Mumbai police's Economic Offences Wing (EOW) have found.

- Vinay Dalvi

MUMBAI:

The bank's former general manager (accounts) Hiten Mehta and former chief executive officer Abhimanyu Bhoan are already behind bars for their role in the alleged embezzlement of ₹122 crore from its cash reserves.

Its former chairman Hiren Bhanu, also an accused in the case, has fled the country and a look out circular has been issued against him.

While probing the alleged embezzlement from the bank's cash reserves, EOW officers found that the three top executives of the bank also colluded to extend loans to borrowers in return for kickbacks.

When the loans turned into non-performing assets, they were sold off to asset reconstruction companies (ARCs) at throwaway prices to maintain a clean balance sheet.

The findings have prompted the EOW to register a separate preliminary inquiry pertaining Background The New India Cooperative Bank started its journey as the Bombay Labour Cooperative Bank Ltd. It was founded in 1968 by socialist leader and former union minister George Fernandes and noted criminal lawyer and trade unionist Ranjit Bhanu. During the initial years, the bank functioned out of Bhanu's residence in Fort's Bazar Gate area.