Sunil Chandra, 37, collection agent of a city-based businessman, was arrested on Tuesday for defrauding a nationalised bank of Rs 7.5 crore.

Police said Chandra had swindled the amount from three branches of South Indian Bank within a year.

The fraud came to the light during an internal audit of the bank about three months ago. The present manager had lodged a complaint with the detective department.

“With the connivance of the managers of all three branches, Chandra managed to withdraw Rs 7.5 crore between 2005 and 2006 by depositing forged cheques,” said Gyanwant Singh, deputy commissioner of the detective department.

According to police, Chandra had opened an account with the Howrah branch of South Indian Bank in February 2005. He later opened two more accounts at two other branches of the same bank. The managers, who were involved in the fraud, favoured Chandra by giving him a “cheque discount facility”.

“With the facility, an account-holder can withdraw more money than he has in his account. The money should be returned to the account within a stipulated period of time. This facility is given to a few, at the bank manager’s discretion. Chandra managed to take the three managers into his confidence,” deputy commissioner Singh said.

All three managers — Sanjiv Reddy of the Howrah branch, David Sunny of the Ganesh Chandra Avenue branch and Jagannath Debnath of the Brabourne Road branch — are absconding.

An investigating officer said that Chandra posed as the owner of Chandra Gold, in Salt Lake, and convinced Sanjiv Reddy to help him carry out the fraud.

“Chandra started withdrawing money at regular intervals from all the three branches by submitting forged cheques. He withdrew around Rs 5.5 crore from the Howrah branch alone by submitting 180 cheques,” said the officer on the case.