SIX people have been arrested in an alleged £1.2 billion Indian bank fraud case.

Central Bureau of Investigation (CBI) spokesman Abhished Dayal said five bank workers and an employee of main suspect Nirav Modi, a billionaire jeweller, were arrested for allegedly conspiring to cheat the Punjab National Bank.

Modi allegedly cheated the state-run bank by using fake “letters of understanding” to get loans. Most of the letters were sent to overseas offices of Indian banks, which made the actual loans, according to Sunil Mehta, Punjab National Bank’s managing director.

Modi reportedly sent a letter to the bank this week saying he owes less than half the amount claimed by the bank in connection with the alleged fraud.

He runs an international jewellery empire that reaches from India to New York, with a string of high-end brands. He and his family fled India weeks before the bank registered a criminal case with the CBI on January 31.

The CBI and other investigative agencies searched dozens of offices and residences used by Modi and his business partners. The bank named Modi, his brother Nishal Modi, wife Ami Modi and uncle Mehul Chinubhai Choksi as suspects in its complaint.