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New India Cooperative Bank

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New India Cooperative Bank
FormerlyBombay Labour Cooperative Bank Ltd.
Company typeCooperative bank
IndustryBanking, Financial services
Founded6 December 1967; 57 years ago (1967-12-06) in Mumbai, India
FounderGeorge Fernandes
Ranjit Bhanu
Headquarters
Mumbai, Maharashtra
,
India
Number of locations
30 branches (2024)
Area served
Maharashtra, Gujarat
Key people
Shreekant (Administrator)
ProductsLoans, banking services
ServicesRetail banking, loans (home, personal, small business)
Decrease₹22.77 crore loss (2023–24)[1] (2024)
Capital ratio9.06% (CRAR, 2024)
Websitehttps://www.newindiabank.in/

New India Cooperative Bank Limited (also known as NICB) is a Mumbai-based cooperative bank,[2] which was incorporated on 6 December 1967.[3] It provides a range of financial services, including home, personal, and small business loans.[4] As of March 2024, the bank operated 30 branches across Maharashtra and Gujarat, managing deposits of ₹2,436 crore[1] and serving over 130,000 depositors.[5] The bank reported losses of ₹22.78 crore in 2023–24 and ₹30.74 crore in 2022–23.[1]

Since February 2025, the bank has been under scrutiny by the Reserve Bank of India over an alleged ₹122 crore scam.[6][1]

History

[edit]
George Fernandes was the co-founder of the New India Co-operative Bank

New India Cooperative Bank was established in 1968 with the support of socialist leader and former Defence Minister George Fernandes.[7] The bank was founded with the objective of providing financial services to underserved communities and promoting cooperative banking in India.[5][8][9]

The bank was initially headquartered at the residence of Ranjit Bhanu, a criminal lawyer, trade unionist, former MLA, and co-founder,[7] at Bazargate in Fort. It commenced operations with 555 members who had contributing an initial share capital of ₹1 lakh.[10]

It was then known as the Bombay Labour Cooperative Bank Ltd.[7] It was renamed New India Cooperative Bank in 1977 after the Emergency.[11] The bank's founders took inspiration from the German Labour Bank model, which provided services to both workers and businesses.[7]

On 14 February 2025, the Reserve Bank of India appointed Shreekant, former Chief General Manager of State Bank of India, as the Administrator of the bank. A Committee of Advisors, including Ravindra Sapra (former General Manager, SBI) and a chartered accountant, was also appointed to assist in managing the bank.[12]

Finance

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As of 31 March 2024, New India Cooperative Bank reduced its losses to ₹22.77 crore from ₹30.74 crore in the previous year. The bank's advances portfolio declined by ₹155.04 crore (11.66%) to ₹1,174.84 crore, while deposits increased by 1.26% to ₹2,436.37 crore.[13]

The Capital to Risk-Weighted Assets Ratio (CRAR) stood at 9.06%, below the RBI's required 10%. The bank undertook cost-cutting measures, including branch mergers and relocations, and generated ₹31.23 crore from the sale of three properties. As of March 2024, the bank’s gross NPA was 7.96%, and net NPA was 5.43%.[13]

In the 2020-21 financial year, the bank recorded a net loss of ₹6.14 crore. In 2019-20, the bank had reported a net profit of ₹5.17 crore.[14]

Alleged financial irregularities

[edit]

In February 2025, the Economic Offences Wing of the Mumbai Police arrested Hitesh Mehta, former general manager and head of accounts at New India Cooperative Bank, for allegedly misappropriating ₹122 crore from the bank's cash reserves. Dharmesh Paun, a real estate developer, was also arrested for allegedly facilitating the diversion of funds.[15][1]

An inspection by the Reserve Bank of India on 12 February 2025, identified discrepancies in the bank's cash records, revealing ₹112 crore missing from the Prabhadevi branch safe and ₹10 crore from the Goregaon branch safe. Following this, the RBI imposed withdrawal restrictions on the bank.[16] It has been allege that the misappropriation took place over six years, between 2019 and 2025.[1]

The Reserve Bank of India also superseded the board of New India Cooperative Bank for 12 months following financial and operational restrictions related to irregular lending practices.[17]

The Economic Offences Wing of Mumbai Police arrested former New India Cooperative Bank CEO Abhimanyu Bhoan on 20 February 2025 in connection with the ₹122 crore scam, making it the third arrest in the case.[18]

As of 18 March 2025, a total of seven arrests have been made in connection with the case.[19]

In March 2025, the Economic Offences Wing seized properties worth ₹28 crore belonging to Hiren Bhanu, former Chairman of the bank, son of co-founder Ranjit Bhanu[20] and an alleged mastermind of the ₹122 crore scam, under Section 106 of BNS. Hiren Bhanu and his wife, Gauri Bhanu, former Vice Chairperson of the bank, have fled abroad, and a Blue Corner notice has been issued for their extradition.[21][22]

Penalties

[edit]

In August 2021, the Reserve Bank of India had imposed a ₹25 lakh penalty on the bank for non-compliance with fraud monitoring and reporting guidelines, based on statutory inspections of its financial position as of March 2019.[23] In January 2024, a ₹15 lakh penalty was imposed on New India Cooperative Bank by RBI for non-compliance with guidelines on donations and contributions from urban cooperative banks' profits.[24]

See also

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References

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  1. ^ a b c d e f Yadav, Vijay Kumar (18 February 2025). "New India Cooperative Bank scam: Ex-GM was giving depositor's money to traders as unsecured loans during Covid". Indian Express.
  2. ^ "New India Co-op Bank gets shareholders' nod to become an SFB". The Hindu Business Line. 20 January 2020.
  3. ^ "53rd Annual Report 2019-2020" (PDF). newindiabank.in.
  4. ^ "New India Co-operative Bank Ltd". Bloomberg. 20 February 2025.
  5. ^ a b Dalvi, Vinay (20 February 2025). "New India bank customers mull long road ahead, file complaint". Hindustan Times.
  6. ^ "India's RBI imposes business curbs at New India Co-operative Bank on supervisory concerns". Reuters . 13 February 2025.
  7. ^ a b c d Bose, Mrityunjay (15 February 2025). "Bank founded by ex-minister George Fernandes faces crisis". Deccan Herald.
  8. ^ "New India Cooperative Bank: twenty years of growth and service". The OtherSide (72–83). Ravi Nair for Pratipaksh Prakashan: 6. 1988.
  9. ^ "India Today". India Today (11). Living Media India: 61. 1986.
  10. ^ Kulkarni, Dhaval; Mukherjee, Ashish (28 February 2025). "How New India Cooperative Bank's better days had a George Fernandes link". India Today.
  11. ^ Gupta, Rohit (31 October 2018). "New India Co-op Bank: Financial parameters shrink, not the spirit". Indian Cooperative.
  12. ^ "RBI supersedes New India Co-operative Bank Board for 12 months, appoints administrator". The Financial Express. 14 February 2025.
  13. ^ a b Gupta, Rohit (3 October 2024). "New India Co-op Bank cuts losses; hopeful of turnaround". Indian Cooperative.
  14. ^ Gupta, Rohit (23 November 2021). "New India Co-op Bank suffers loss, fails to give dividends". Indian Cooperative.
  15. ^ Pathak, Manish Kumar (17 February 2025). "New India bank scam: Realtor who got ₹70 crore from loot arrested". Hindustan Times.
  16. ^ Mishra, Ayush (19 February 2025). "RBI halts New India Co-op Bank operations: How to secure your savings". Business Standard.
  17. ^ Prasad, Nikita (15 February 2025). "New India Co-operative Bank fraud case: How will the RBI crackdown impact account holders, depositors?". Livemint.
  18. ^ Rajput, Sagar (21 February 2025). "Former CEO of New India Coop Bank arrested in Rs 122-cr scam". Indian Express.
  19. ^ "Businessman held in New India Bank scam; seventh arrest so far". The Economic Times. 18 March 2025.
  20. ^ Dalvi, Vinay (1 March 2025). "New India Co-op Bank fraud: Ex-chairperson Hiren Bhanu named as accused, one more arrest". Hindustan Times.
  21. ^ Apraj, Poonam (19 March 2025). "₹122 Crore New India Co-op Bank Scam: EOW Seizes ₹28 Crore Properties Of Bhanu Couple". The Free Press Journal.
  22. ^ "New India Coop Bank: EOW searches ex-chairman's home in Rs 122 cr fraud". Business Standard. 5 March 2025.
  23. ^ "RBI imposes monetary penalty on New India Co-operative Bank, Jalgaon People's Co-operative Bank". Moneycontrol.com. 27 August 2021.
  24. ^ "RBI imposes monetary penalty on five cooperative banks". Moneycontrol.com. 18 January 2021.
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