The Mumbai Police Economic Offences Wing (EOW) has sought clarification from the Reserve Bank of India (RBI) as part of its ongoing investigation into the alleged ₹122 crore New India Co-operative Bank scam.
The EOW has also initiated a preliminary enquiry (PE) into the bank’s non-performing assets (NPA) of over ₹400 crore and the disbursement of loans to defaulting accounts despite repeated non-payments. The investigation revealed a rise in NPAs and an increase in cash on hand, with no prior inspections conducted by the RBI. These irregularities went undetected for three years despite the bank being under the central bank’s supervision for the past five years.
Probe officials have sent a detailed questionnaire to the RBI, raising concerns over the central bank’s audit and supervisory processes related to the cooperative bank.
“A detailed note was sent to the RBI asking for the reasons behind its decision to bring the New India Co-op Bank under supervision and what prompted inspections of the bank,” confirmed an EOW official.
Some of the key questions posed to the RBI include:
What was the nature of the RBI’s audit of the bank?
Who were the officials who conducted and supervised the audit?
How did significant irregularities go unnoticed during the inspection?
The RBI has responded to the first set of questions, but EOW officials claim the replies were unsatisfactory and require further explanation. The police will also question two RBI representatives who served on the bank’s board.
The central bank has maintained that it does not monitor the day-to-day operations of banks.
