The Enforcement Directorate has arrested K Ramakrishna, president of Bangalore based Sri Guru Raghavendra Sahakara Bank, where a scam of Rs 1,480 crore was unearthed.
Nearly 40,000 depositors are affected and most of them are senior citizens.
BJP MLA Ravi Subramanya had raised the question about the fraud in the assembly. It is said the bank is liable to pay Rs 2,073 crore and Rs 375 crore as an interest to 994 fixed deposit holders.