New Delhi, July 6: The CBI today arrested two senior retired officers of Bank of India in connection with alleged loan fraud of Rs 2,654 crore by Vadodara-based Diamond Power Infrastructure Ltd. (DPIL).

V V Agnihotri and P K Shrivastava, retired GM and DGM respectively, had allegedly granted undue favours to the company in granting credit limits, the officials said.

They said both have been arrested today and will be produced before special court in Ahmedabad tomorrow.

The promoters of the company were arrested in April this year.

The agency in an FIR had said that the DPIL, which manufactures electric cables and equipment, is promoted by Suresh Narain Bhatnagar and his sons Amit and Sumit, who are also the directors of the firm

The loan, it said, was declared a non-performing asset in 2016-17.

"It is alleged that the DPIL, through its management, fraudulently availed credit facilities from a consortium of 11 banks (both public and private) since 2008, leaving behind an outstanding debit of Rs 2,654.40 crore as of June 29, 2016," the agency had said

While Agnihotri was posted as AGM, Shrivastava was posted as DGM in the Zonal office of Bank of India in Vadodara in 2007-08. Agnihotri had retired as GM and Shrivastava as DGM.

"Both had shown undue favour in the sanction of the working capital Limits to a Vadodara based private firm in the year 2008. It was also alleged that both these officials were responsible for the processing and recommending the Working capital Limits to the tune of Rs. 53.40 crore (approx.) in violation of the guidelines of the bank," CBI spokesperson Abhishek Dayal said.

He said they were also allegedly responsible for disbursal of limits without ensuring compliance of conditions stipulated in the sanction.

The company and its directors managed to get term loans and credit facilities despite being on the Reserve Bank of India's defaulters list and the Export Credit Guarantee Corporation's caution list at the time of the initial sanction of credit limits by the consortium, the CBI alleged.

When the consortium was formed in 2008, the Axis Bank was the lead bank for the term loan and the Bank of India was the lead bank for cash credit limits

It is alleged that the firm, with active connivance of officials from various banks, managed to get enhanced credit facilities.

According to the CBI, the company had allegedly submitted false stock statements to the lead bank by treating receivables more than 180 days (non-current asset) as less than 180 days (current asset) to get more drawing power in their cash credit accounts.