The Mumbai Police’s Economic Offences Wing on Saturday arrested one of the former directors of Punjab and Maharashtra Cooperative Bank, reported PTI. Rajneet Singh is the son of former Bharatiya Janata Party MLA Sardar Tara Singh.

The Enforcement Directorate is looking into allegations that the bank did not report all non-performing assets, or bad loans, after providing funds to a number of companies. The scam is said to be worth Rs 4,355 crore. The loan defaults are said to have caused a liquidity crisis at the bank.

Singh, who is also a member of the loan recovery committee of the bank, was arrested as he gave evasive replies when questioned about the loan granted to Housing Development Infrastructure Limited, said an unidentified official. “Rajneet provided unsatisfactory and unconvincing explanations, which hints at his likely role in the scam,” the EOW said in a statement, according to NDTV. He will be produced in a holiday court on Sunday.

Earlier, the police had arrested HDIL promoter Rakesh Wadhawan and his son Sarang Wadhawan in connection with the case. The Wadhawans allegedly created more than 21,000 fictitious accounts to hide loans from PMC Bank. They continued to default on the loans that the bank allegedly did not mention in its annual report.

So far, nine people, including three top officials of the bank, have been arrested.

Earlier this month, the Reserve Bank of India said it was “closely monitoring” the position of the bank, and would continue to take measures in the interest of depositors. The top bank’s statement came a day after the Bombay High Court directed the RBI to file an affidavit disclosing what steps it had taken to protect the interests of depositors of the bank. The court was hearing petitions in connection with the fraud at the multi-state cooperative bank and the restrictions imposed by the RBI on withdrawals from the bank.

In September, the RBI imposed curbs on the bank, saying that depositors would not be allowed to withdraw more than Rs 1,000 from the bank for six months. The withdrawal limit was raised to Rs 25,000, and then to Rs 40,000 in October. On November 5, the RBI again increased the withdrawal limit to Rs 50,000.