Patna/Bhagalpur, Aug. 19: The special investigation team (SIT) probing the fund transfer scam made a significant breakthrough following the arrest of the managing director of a cooperative bank from neighbouring Supaul district on Friday.

Pankaj Jha was the managing director of the cooperative bank in Bhagalpur from 2007 to 2014, the period when huge sums of government funds were diverted to the accounts of the non-government organisation Srijan Mahila Vikas Sahyog Samiti Limited.

Pankaj was interrogated by SIT members at an undisclosed location after being taken into custody from his office in Supaul district yesterday. "He has given vital clues about the scam. We are verifying the revelation made by him," said an investigating officer who was present during his questioning.

It was during Pankaj's tenure that former additional district magistrate of Bhagalpur Jay Shree Thakur had deposited a cheque of Rs 6.32 crore in the account of Srijan for clearance in July 2013. The state government on Friday terminated the service of Thakur. However, she is facing charges of accumulating property disproportionate to her known sources of income.

The SIT comprising officials of the economic offences unit and the district police made another important catch in the case, Mohammad Taukir Kasim, the assistant manager of Indian Bank. During interrogation, Kasim told the interrogators that a cheque book was issued in favour of the Bhagalpur district magistrate on the basis of a request letter dated August 26, 2016.

The cheque book was issued on the persuasion of Ajay Pandey, who was posted at Sabour branch of the bank. "When I objected to handing over the cheque book to a private driver Vinod, Ajay Pandey said that he was a reliable person and he should be given the cheque book. I provided him the same after obtaining his signature on the register," a senior police official quoted Kasim as saying.

The same cheques were used for transferring Rs 550 crore to the accounts of Srijan on September 1, September 3 and September 6, 2016, respectively. "The role of the then branch manager of Indian Bank is being verified," the police officer said, adding that Vinod earlier used to render his services to Srijan's late founder-secretary Manorama Devi.

The assistant manager of Indian Bank apprehended that the cheque book reached the office of the NGO instead of the office of the district magistrate.

On Friday, manager of Bank of Baroda Atul Raman was arrested by the SIT. He was later produced before the local court, which sent him to judicial custody for two weeks. Sources said Atul had been named as a non-FIR accused in a case lodged with the Kotwali police station.

Atul has been accused of providing statements of accounts of the district administration to Manorama Devi. In April this year, he had purchased a house in Bhagalpur for Rs 51 lakh. The SIT seized documents related to his investments during search of his house yesterday.

Bhagalpur senior superintendent of police (SSP) Manoj Kumar said that so far 12 persons have been arrested in the scam. "Raids are under way to arrest more suspects in the case," he said, adding that the SIT had traced the money trail beyond Bihar's boundaries.

Earlier, two bankers, Pandey of Indian Bank and AK Singh of Bank of Baroda, were arrested. "All the three arrested bank officials pleaded innocent but we had sufficient evidence to prove their complicity with the NGO and the personnel of the district administration," said the SSP.