Three businessmen have been arrested by the police for setting up fraud companies, forging a letter of credit (LC) of PNB and defrauding State Bank of India, Fort branch, Mumbai of Rs 8.9 crores.

The people arrested are Satish Krishna Pujari (42) who acted as the director of Micro Bit Associate Private Limited, Akhilesh Pandey, proprietor Meroo Polymers and Anoop Roy of Krishna Corporate Services Pvt Ltd.

They have been kept in police custody.

The Central Bureau of Investigation (CBI) is in search of more accomplices who might have been part of the foul play.

The scam came into light through Ganesh Anantharam, assistant general manager of SBI, Fort branch.

The accused had submitted five forged LCs to SBI for being discounted issued by PNB. "Before discounting the LCs, the SBI had contacted PNB officials over the phone for confirmation. This is regular procedure for any bank and SBI received the confirmation. Now we are investigating who gave confirmation on behalf of PNB in Solhapur," said a CBI official.