Mumbai Police Probes ARC Over NPA Loan Embezzlement

Mumbai police's Economic Offences Wing is investigating a Rs 122 crore embezzlement case involving New India Cooperative Bank and an asset reconstruction company. Certain Non-Performing Assets were undervalued, leading to significant financial loss. Senior officials from Omkara ARC are being called for inquiries to determine the cause of discrepancies.

The Economic Offences Wing (EOW) of Mumbai police is intensifying its probe into a Rs 122 crore embezzlement case linked to the New India Cooperative Bank, an official disclosed on Monday. Central to the investigation is an asset reconstruction company (ARC) whose managing director and CEO have been summoned to provide statements within the week.

During the investigation, it was revealed that numerous loans at risk of default, known as Non-Performing Assets (NPAs), were transferred to this ARC. Notably, discrepancies emerged, with the bank recovering significantly less than expected from these asset sales, raising red flags about potential financial mismanagement.

One notable instance highlighted an original loan of Rs 30 crore yielding only Rs 2-3 crore in recovery for the bank after being sold by the ARC. To unravel the reasons behind these undervalued transactions, EOW officials intend to question senior personnel from Omkara ARC. Although the inquiry has been slated for this week, no specific dates have been established.

(With inputs from agencies.)