According to the Local Crime Branch (LCB) police, the arrests of a Navsari-based diamond merchant and his accomplice -- after they allegedly tried to encash a stolen transfer payment order (TPO) from the bank -- have brought to light one of the biggest attempted bank fraud in the region in the past few years.

The accused were produced before a magistrate on Tuesday evening and remanded to three days custody.

According to information, one Suryakant Amritlal Gandhi, a diamond merchant residing in Navsari, had opened a current account (No 1031) in the name of Lokesh James in the Mahatma Gandhi Road branch of the PNB about four months ago.

On May 3, a TPO bearing the number RNH 692998 was deposited in James' account. It may be noted that seven TPOs of the PNB, Delhi branch, bearing the numbers RNH 692994 to RNH 693000, had been reported stolen earlier.

On Monday, the LCB stated, the PNB branch in Navsari received a courier letter from the Delhi branch, stating that Rs 20 crores be transferred to James' account. Smelling a rat, the branch manager, Jagdish Laxman Shah, confirmed the same with the Delhi branch, who asked him to fax a copy of the TPO.

Within an hour, the Delhi branch called back asking to stop payment of the order as it was stolen and that the police be alerted. Later, on Monday noon, a man named Mahesh approached the bank and inquired if the TPO had arrived, but left after being replied in negative.

Then again, at around 3 pm, Gandhi, along with one Prakash Sheth -- employed as an account writer -- arrived at the bank and sought information about the TPO. This time, the LCB police, comprising PSI S C Gameti and others pounced upon them and took them into custody.

The LCB is now trying to find out how Gandhi and Sheth managed to get hold of the TPO stolen from Delhi and whether they have the other six TPOs.