MUMBAI Aug 28 Police in India's financial
capital have arrested four people alleged to have siphoned off
money from accounts held in multiple banks, mostly state-owned,
in the latest scandal involving public sector lenders in Asia's
The economic offence wing of the Mumbai police is looking
for six more suspects, a deputy police commissioner told
reporters on Thursday, adding that the alleged fraudulent
withdrawals total about 2.38 billion rupees ($39.3 million).
The case comes hard on the heels of an alleged more than 4
billion rupee fraud at branches of state lenders Dena Bank
and Oriental Bank of Commerce, which
authorities are investigating separately.
In another incident, the head of state-run Syndicate Bank
was arrested this month over allegations that he was
seeking bribes to favour debtors.
State-run banks in India have in recent years reported bad
loans growing faster than their private sector peers, while in
some cases there have been allegations of corruption.
In the latest case, funds from eight accounts held in
branches of seven state-run banks - Bank of India,
Punjab National Bank, Vijaya Bank, State
Bank of Bikaner and Jaipur, UCO Bank,
Central Bank of India and Dena Bank - were withdrawn
illegally, the police official said.
There was one case of fraud at a Mumbai branch of private
sector lender Dhanlaxmi Bank, the official said.
Shares in Dhanlaxmi had fallen 4.7 percent on earlier local
media reports that named the bank as one of those involved in
No bank executives have yet been named in relation to the
Dhanlaxmi Bank Chief Executive P.G. Jayakumar declined to
comment, as did a spokesman for Punjab National Bank.
A Dena Bank spokesman said the latest case related to the
fraud previously reported by the bank, without elaborating. Dena
Bank said last week that 2.23 billion rupees had been
"surreptitiously transferred" out of the bank.
The other state-run lenders could not be reached immediately
($1 = 60.4950 Indian rupee)
(Reporting by Devidutta Tripathy; Editing by David Goodman)