New India Co-op Bank case: ED launches money laundering probe, seizes valuables worth ₹1 crore

MUMBAI: The Enforcement Directorate (ED) on Thursday carried out searches at seven locations across Mumbai and Gujarat in connection with an alleged ₹122 crore bank fraud involving the New India Co-operative Bank (NICB). The searches, conducted under the Prevention of Money Laundering Act (PMLA), led to the seizure of valuables worth ₹1 crore and several documents, including property records.

The search operation centred on Hiren Bhanu, former chairman of New India Co-operative Bank, who allegedly facilitated the diversion of bank loans that turned into non-performing assets (NPAs). According to ED officials, these funds, estimated to exceed ₹45 crore, were transferred to overseas entities linked to Bhanu. The alleged transactions were traced during ED’s search operation. The embezzlement at the bank came to light during a Reserve Bank of India (RBI) risk assessment, which first flagged the same. Mumbai police’s Economic Offences Wing (EOW) is also probing the matter under various sections of the Bharatiya Nyaya Sanhita.

ED officials stated that the current phase of the investigation focuses on tracing the flow of funds and identifying beneficiaries involved in the misappropriation, which has not only affected NICB but also impacted its depositors.

Reacting to ED’s action, Bhanu’s lawyer Sajjal Yadav told HT on Friday, “My clients are not aware of the ED action. The funds received by Bhanu in his overseas companies were in the routine course of his business and have no nexus with banking operations or theft of ₹122 crore from the bank. Hiten Mehta, in connivance with auditors, has physically stolen cash from the bank that was not even noticed by the RBI nominated members on the board of the bank over the last few years. The Bhanus have addressed multiple letters to the EOW to examine them on video - conferencing. No summons has been received from ED.”

In a separate operation on Friday, ED conducted searches in Malegaon, Nashik, as part of a parallel investigation into a suspected large-scale scam involving delayed birth and death certificates. The probe is based on multiple FIRs registered across districts including Akola, Amravati, Chhatrapati Sambhaji Nagar, Latur, Nashik (Rural), and Parbhani.

The scam involves the use of forged documents — such as tampered school leaving certificates, Aadhaar cards, and ration cards — to fraudulently obtain delayed registration of births or deaths. In Malegaon alone, two cases revealed that 3,127 such certificates were issued between August 2023 and December 2024, suggesting a widespread racket involving agents, document forgers, and beneficiaries.

Based on intelligence inputs, ED examined bank accounts of suspects and agents linked to the alleged racket. The analysis indicated frequent UPI transfers and cash deposits believed to be bribe money. One key agent’s account was reportedly used to collect bribes on behalf of a former Naib Tehsildar of Malegaon Tehsil. The bribe amounts were quickly dispersed to multiple individuals suspected to be part of the network.

The police cases, mostly initiated on complaints by tehsildars, describe how applicants submitted fake documents and manipulated Aadhaar details to obtain fraudulent birth certificates. In some instances, individuals applied for multiple birth records with differing information, pointing to a systematic attempt to bypass verification protocols. Both investigations remain ongoing.