Mangaluru : Five employees of Indian Overseas Bank, including its manager, have been arrested for allegedly embezzling Rs 55 crore in fixed deposits in the name of Karnataka Rural Infrastructure Development Limited.

Suratkal Police arrested IOB manager Serin Madhusudan and the other four and produced before a court, which remanded to judicial custody, police said.

KRIDL had earlier suspended three officials in connection with the diversion of funds, which was allegedly done with the help of the bank officials.

Police said their investigations revealed that two Fixed deposits of Rs 20 crore and Rs 35 crore in the Kulai branch of IOB were later transferred to other accounts.

The fraud came to light when officials of the Koramangala branch of Vijaya Bank grew suspicious after Rs 50 lakh was transferred to a dormant account of an exporter, police said.