A director of India's Kapol Cooperative Bank (KCB), Hiren Mehta, accused of helping three businessmen siphon off the equivalent of around US$2.3 million by submitting bogus letters of credit (L/Cs), has been arrested.

The accused, who has been remanded in police custody, faces several charges relating to forgery and breach of trust.

Suspects wanted

The banker is the third person to be arrested in the scam after police earlier apprehended IndusInd Bank official, M Nair and businessman, Quresh Rajkotwala.

Police are reportedly also keen to question the businessman's brother Zuzar Rajkotwala and a director of Decent Corporation, Deepak Bhatia, about the scam.

Bankers' involvement

A complaint has been filed by a KCP branch alleging that the businessmen submitted bogus L/Cs and siphoned off the money.

The bankers were allegedly complicit in the conspiracy. Mehta is said to have influenced subordinates to help the businessmen open accounts that were used in the scam.

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