Mumbai Police EOW Nabs Dharmesh Paun After Bank Audit Uncovers Fraud
Mumbai: The Economic Offences Wing (EOW) of Mumbai Police arrested private developer Dharmesh Paun from Kandivali on Sunday in connection with the ₹122-crore scam at New India Cooperative Bank. Paun allegedly received ₹70 crore from the bank’s general manager and account head, Hitesh Mehta, who was arrested a day earlier for siphoning off funds.
Both Mehta and Paun were presented before the Esplanade court on Sunday, which remanded them in police custody until February 21 for further investigation.
Scam Uncovered During RBI Audit
The fraudulent scheme was exposed last Wednesday during an audit at the bank’s headquarters in Prabhadevi, where RBI officials discovered ₹122 crore missing from the vault. Later that evening, Mehta, a long-time employee of the bank since 1988 who was set to retire next year, admitted to stealing money from the Prabhadevi and Goregaon branches since the pandemic. He confessed in writing that he had diverted the funds for investment purposes, distributing them among associates.
Connections to Real Estate and Electrical Firms
Following Mehta’s arrest, the investigation revealed that ₹70 crore of the stolen money was funneled into Paun’s real estate firm. Mehta had previously bought a flat through Paun and maintained financial dealings with him. The last known transaction was in January 2025, amounting to ₹59 lakh, with a previous investment of ₹1.75 crore in mid-2024.
Another suspect, Unnanathan Arunachalam alias Arunbhai, an electrical contractor, allegedly received ₹40 crore from Mehta and is currently absconding.
Court Grants Police Custody for Further Investigation
During the court proceedings, the public prosecutor emphasized the need for custodial interrogation to determine if more bank officials or external accomplices were involved in the scam. Given that the siphoned money came from public deposits, the prosecutor argued that a thorough probe was essential.
RBI Takes Over Bank Operations
Following the revelations, the Reserve Bank of India (RBI) imposed strict restrictions on New India Cooperative Bank on Thursday, barring it from issuing loans, making investments, or accepting fresh deposits without prior approval. The following day, the RBI took control of the bank’s operations, dismissing its board of directors and appointing former SBI chief general manager Shreekant as administrator for the next 12 months.
The investigation continues as authorities work to trace the missing funds and hold those responsible accountable.
