An alleged letter of credit (L/C) fraudster has been apprehended in the Indian state of Gujarat.

The man is reported to have duped a co-operative bankout of the equivalent of around US$1.25 million.

New company

According to a police official, Prakash Desai from Ahmedabad applied for a loan of around US$1.25 millon from Visnagar Nagrik Sahkari Cooperative Bank (VNSC Bank) to establish acompany calledPiyush Steels.

When the bank asked for references, Desai promised to show L/Cs as proofof bank accounts in Gujarat and elsewhere in India.

Fraudulent L/C

Desai allegedly then produced an L/C, apparently issued by the Raigarh branch of Bank of India to VNSC Bank.

As the L/C seemed authentic, VNSC Bank extended credit to Desai, who then is said to have withdrawn the money and disappeared.

The L/C was subsequently found to be fraudulent.

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