Mumbai Court Sends Bank Accused to Five-Day Police Custody
Mumbai: Account holders of the troubled New India Co-operative Bank are facing a long and uncertain road to recovering their savings, as the fallout from the bank’s financial crisis continues. On Sunday, over 100 anxious depositors gathered at Keshav Gore Hall in Goregaon West to discuss possible legal and financial recourse. This came just three days after the Reserve Bank of India (RBI) imposed a six-month transaction ban on the bank following a ₹122 crore embezzlement case.
Meanwhile, a Mumbai court has remanded former General Manager Hitesh Mehta to five-day police custody, with police officials stating that he was evasive during questioning but that his involvement in the fraud had been established.
Customers Protest, Demand Clarity
At Sunday’s meeting, depositors voiced frustration over the bank’s lack of transparency. Many had filed claims for recovery on the bank’s website but were still in the dark about when they would regain access to their money. Concerns were particularly high over deposits exceeding ₹5 lakh, as the bank has only assured repayment of smaller deposits within 90 days.
Following the discussion, the depositors marched to the Goregaon police station, where they filed a formal complaint against the bank.
Impact on Middle-Class and Poor Depositors
Founded in 1968 with the support of socialist leader George Fernandes, New India Co-operative Bank operates 28 branches across Maharashtra and Gujarat, catering to over 130,000 customers. The crisis has hit the poor and lower middle-class depositors the hardest, with 90% of account holders having savings of less than ₹5 lakh.
The RBI’s six-month ban stems from the alleged misappropriation of funds at the bank’s Goregaon and Prabhadevi branches. Following the announcement, panicked customers rushed to their local branches, only to find that withdrawals were not permitted. Signboards at branch entrances assured depositors that balances below ₹5 lakh would be repaid within 90 days, but no information was provided about larger deposits.
Struggles of Affected Depositors
The uncertainty has put depositors in dire financial straits:
- Neelima Kanore, a homemaker from Mira Road, was already struggling to care for her husband after a paralytic attack. She now cannot access her savings exceeding ₹5 lakh, which she had earmarked for medical expenses and her children’s education.
- Ramesh Ladva, a chartered accountant, had ₹30 lakh across six accounts and fixed deposits in the bank’s Goregaon branch. He had been saving for a home for eight years and is now unsure if he will ever recover his money.
- Rakesh Joshi, a senior citizen, had ₹35 lakh in the Kandivali branch. He had also opened a savings account for his one-year-old grandson just three months ago, planning to use it for his future education.
Legal Challenges Ahead
Sunday’s meeting left depositors feeling even more uncertain after Vishwas Utagi, former general secretary of the All India Bank Employees Association, cast doubt on whether the Deposit Insurance and Credit Guarantee Corporation (DICGC) would actually pay out deposits below ₹5 lakh within 90 days.
He cited Section 18A of the DICGC Act, which requires a bank to be liquidated before insured deposits can be paid out. This means customers might face an even longer wait for their money.
Police Complaint and Next Steps
As an immediate step, depositors drafted and submitted a formal complaint at Goregaon police station.
“Our hard-earned life savings are stuck with New India Co-operative Bank, and we are facing extreme hardship,” the complaint stated. It further accused the bank of mismanagement and fraud, while also demanding clarification from both the bank and the RBI about the fate of their deposits.
Meanwhile, investigations continue into the bank’s financial irregularities. Reports indicate that over a third of New India Co-operative Bank’s loan book is tied to the real estate sector, raising further concerns about the bank’s lending practices.
For now, depositors are gearing up for a long legal battle to reclaim their savings.
