Thane, Mar 18 (PTI) An organisation representing depositors of the New India Co-Operative Bank, hit by alleged embezzlement of Rs 122 crore, have submitted a petition to the Reserve Bank of India, seeking immediate measures to revive the bank for ending their financial hardships.

In the petition, the organisation said it suspects that "deeper financial irregularities like undisclosed non-performing assets (NPAs) or additional frauds could be contributing to the crisis".

On February 15, the Economic Offences Wing (EOW) of the Mumbai police arrested Hitesh Mehta, General Manager and Head of Accounts of the New India Cooperative Bank, for allegedly misappropriating Rs 122 crore from the bank.

Two days prior to that, the RBI had imposed several restrictions on the bank, including on withdrawal of funds by depositors, citing supervisory concerns emanating from the developments in the bank, and to protect the interest of its depositors. A day later, it superseded the cooperative bank's board for a year and appointed an administrator to manage its affairs.

The investigation into the alleged discrepancies began when internal audits revealed significant cash shortages in the safes of the Prabhadevi and Goregaon branches in Mumbai.

In a formal memorandum of demands submitted to RBI Governor Sanjay Malhotra, the New India Co-Operative Bank Depositors' Foundation comprising affected individuals and cooperative societies sought immediate remedial measures to alleviate their financial hardships and revive the bank.

Foundation president T N Raghunatha said, "The petition highlights the plight of depositors who are unable to access their savings, which has impacted the daily lives, including medical expenses and education of family members. The depositors are suffering due to fraudulent activities perpetrated by the bank's management, rather than any mismanagement on their own part." One of the primary grievances raised by the foundation is the inadequacy of the '‚¹5 lakh deposit insurance coverage, which is insufficient for many depositors with significantly higher savings. There have also been reports of bank officials pressuring customers to accept this payout without providing clarity on the fate of their remaining deposits.

The petition argues that a fraud amounting to Rs 122 crore should not have been severe enough to destabilize a bank with a deposit base of Rs 2,436 crore as of March 2024.

The forum suspects that deeper financial irregularities, such as undisclosed non-performing assets (NPAs) or additional frauds, may be contributing to the crisis.

The depositors' foundation has demanded transparency from the RBI, seeking details on the audit findings of the NICB's accounts.

"The crisis is not just a financial issue but a matter of livelihoods and security for thousands of families," it said, and urged the central bank to take immediate steps to address their concerns and ensure stability in the cooperative banking sector. PTI COR NP

Deposit insurance insufficiency prompts petition for regulator transparency and urgent measures to revive a cooperative bank Depositors of New India Co operative Bank have petitioned the central bank for immediate measures after an alleged embezzlement by a senior accounts officer, the imposition of supervisory restrictions including withdrawal limits, and the board's supersession with appointment of an administrator. The petition argues the alleged fraud alone should not have destabilised the bank, raises concern about possible undisclosed non performing assets or further frauds, criticises the insufficiency of deposit insurance coverage for many depositors, and demands transparency on audit findings and regulatory assessments to protect depositors and revive the bank.