New India Co-operative Bank scam probe unearths NPAs

(Left) Hitesh Mehta, former general manager of the New India Co-operative Bank is produced in the Esplanade court on February 16. Pic/Ashish Raje

More than 2000 accounts linked to the New India Cooperative Bank scam have turned into non-performing assets (NPAs), the Economic Offences Wing (EOW) has said. EOW conducted a preliminary enquiry into these NPA accounts following a complaint by an account holder. The complainant alleges that nearly R400 crore worth of loans have turned into NPAs.

This revelation comes in addition to the Rs 122 crore embezzlement case, in which the EOW has already arrested seven individuals. The fresh probe into the NPA accounts has unearthed shocking claims - that loans were allegedly granted to ineligible individuals by former Vice Chairman Hiren Bhanu and his wife, Gauri Bhanu, who is the acting Chairman. The Bhanu couple, who are wanted in the Rs 122 crore scam, are currently believed to be abroad.

EOW sources confirmed that one such account from 2014 has officially turned into an NPA. Their investigation spans accounts from 2010 to 2024. According to the complainant, the Bhanus allegedly approved dubious loans in exchange for hefty commissions.

Initially, the EOW's focus was solely on the Rs 122 crore fraud. However, after receiving the complaint about the NPA accounts, the agency has expanded the scope of its investigation. "We will investigate whether rules were violated in granting these loans, which significantly affected the bank's financial health. We plan to register an FIR in this case," said an EOW officer.

What are NPAs?

An NPA (or non-performing asset) is a loan or advance overdue for more than 90 days. It becomes a non-performing asset as it stops generating income for the bank. RBI adopted the 90-day rule in 2004 to align with global standards. NPAs are further classified based on how long payments have been overdue.

Source: groww.in