Two officials at India's Corporation Bank have been arrested and two more are reportedly under investigation in a fraud case involving letters of credit (L/Cs).

Two foreign exchange managers, named in documents only as Somayajulu and Shankar, have been arrested.

According to local media, assistant general manager Anand Naik and deputy general manager Padmanaba Reddy, are likely to be arrested.

Officials colluding

Investigators suspect the two senior managers sanctioned loans against forged L/Cs in collusion with their colleagues working in the foreign exchange unit.

All four bank officials worked at Corporation Bank's Tirupur branch.

Knitwear connection

The bank officials are under investigation for frauds allegedly perpetrated by three knitwear exporters.

The bank allegedly authorised credits against L/Cs for US$1.25 million, US$920,000 and US$589,000.

Arrests

Police have already arrested several people as a result of their investigations.

Investigators say officials working in the customs department also colluded with the alleged fraudsters.

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