Ex-bank official disputes claims of receiving R26 crore from scam accused, claims Hitesh Mehta admitted to embezzling money
Former chairman Hiren Bhanu of New India Co-operative Bank and his wife, Gauri Bhanu, the acting chairperson and vice-chairperson of the bank
The former vice chairman of New India Co-operative Bank, Hiren Bhanu, has defended himself in a letter to the Economic Offences Wing (EOW) through his lawyer, Sajal Yadav, claiming innocence in the alleged Rs 122 crore scam. He stated that his wife’s abroad trip was pre-planned and did not constitute fleeing the country. He also clarified that he has been residing abroad for the last 30 years and is currently in the UAE. mid-day had earlier reported that Gauri Bhanu went to Thailand just three days before the scam came to light while Hiren Bhanu had been in UAE since January 26.
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Bhanu-Mehta exchanges
Bhanu recounted that on February 12, he received a call informing him that 10–12 RBI officials had unexpectedly arrived at the bank’s head office in Prabhadevi, Mumbai. Former CEO Abhimanyu Bhoan, who was on leave that day, was also unaware of the visit. Bhanu immediately contacted senior staff members, who informed him that RBI officers had restricted entry to senior officials and instructed the IT department to revoke email access. Bhanu expressed concerns about data mishandling, as crucial documents needed for his defence were stored in his emails.
During the inspection, senior officer Hitesh Mehta went missing from the premises, causing panic among the staff. Bhanu instructed his colleagues to check CCTV footage, which revealed Mehta had walked out of the office. Despite repeated attempts to contact him, Mehta’s phone remained switched off. Later, Mehta called Bhanu and admitted in Gujarati, “I did it,” confessing to embezzling money over five years.
According to Bhanu, Mehta claimed to have given R70 crore to a Dahisar-based builder, Dharmesh Paun, for a slum rehabilitation project expected to generate R700 crore. He also mentioned handing over R40 crore to a person identified as Arunbhai and giving smaller amounts to five other individuals. Mehta assured that the bank would not face losses, as Paun’s project was approved and construction had begun. Bhanu said he kept Mehta engaged over the phone, convincing him to return to the bank and face the RBI officers.
Bhanu stated that he took an affidavit from Mehta, in which Mehta confessed that he acted on his own will and that no one else was involved in the embezzlement. He also questioned how an RBI officer allowed Mehta to leave despite his confession and even provided his personal number to Mehta.
On wife’s involvement
Regarding allegations that his wife received cash from Mehta, Bhanu said that all personal bank accounts and records were handled by Kaushik Patel, a long-time employee and trusted family associate. Signed blank cheques were kept with Patel for cash withdrawals as per oral instructions, which were later delivered to the family by Mehta. Bhanu denied ever receiving any cash or cheque from the bank other than his family’s own withdrawals and stressed that their income sources are documented in their income tax returns. He dismissed Mehta’s claim of giving Rs 26 crore to him as false and uncorroborated. mid-day has reported that during interrogation Mehta had given initially contradictory statements and later revealed that Rs 26 crore was given to the Mehta couple. His lie detector test was also conducted and the report came negative which means that he had lied throughout the investigation.
Involvement of others
Bhanu also raised concerns about the involvement of auditors, cashiers, and other staff in the scam, questioning how the fraud went undetected despite RBI supervision since 2021. He claimed that the board was never alerted about cash management issues. RBI Supervision and Independent Audit Since 2021.
RBI supervision
According to Bhanu’s letter, the bank has been under RBI supervision since May 24, 2021, as part of the RBI Supervisory Action Framework following the declaration of major accounts as NPAs. An RBI representative has been present on the Board since then, initially Anish Kumar and later Ashish Gupta.
The bank’s internal audit processes were overseen by CA Prakash Vernekar, deputy general manager of the inspection and Audit Department, whose reports consistently recorded “no adverse remarks” and did not identify any discrepancies in cash counts or related matters.
Additionally, RBI supervisors regularly accessed the Core Banking System (CBS) of the bank to review various reports. Despite these consistent checks, no issues related to cash holdings were flagged by supervisors Ravindran and Rajat. Over the past three years, both officers frequently communicated with Hitesh Mehta and Abhimanyu Bhoan, often late at night, requesting information for the following morning. According to Bhanu, his wife was informed about these communications on a tri-weekly basis, but no issues regarding cash holdings were ever raised.
The bank’s books and treasury were also periodically monitored and verified by independent external auditors on a quarterly basis. These auditors did not report any irregularities or raise adverse findings to the Audit Committee of the Board (ACB), the Board itself, or the RBI.
Cash storage and movement
Bhanu explained that the bank follows an RBI-approved cash handling policy, regularly checked by the Inspection and Audit Department. Each branch has a cash vault with a pre-sanctioned storage limit from the RBI, based on insurance and security requirements. The Chest Branch for cash storage is located at Goregaon and handles cash management exclusively.
Daily cash counting and verification are mandatory at all branches, conducted by at least two individuals with a dual-key system. High-value transactions and cash reconciliations are examined daily by the external concurrent auditor, while quarterly and annual audits involve physical cash verification by RBI officials and independent bodies.
All cash movements through vans are logged, including the amount transported, as mandated for insurance purposes. Only RBI-approved agencies are authorised to operate these cash-carrying vans.
The EOW has so far arrested seven accused in the case including the recent arrest of Javed Azam who is a brother of BJP leader in Mumbai.
Rs 70cr
Money sr bank officer Mehta gave a Dahisar builder as per Hiren Bhanu
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