CBI arrests three people in PNB fraud case - source

NEW DELHI (Reuters) - The Central Bureau of Investigation (CBI) arrested two employees at Punjab National Bank believed to be key figures in the $1.77 billion fraud disclosed by the country's second-largest state-run lender earlier this week, a police source said on Saturday.

The CBI arrested Gokulnath Shetty, who was a deputy manager at Punjab National Bank, and Manoj Kharat, who was described by the source as a "single window operator" at the lender.

The police also arrested a third person, Hemant Bhat, whom the source described as the "authorised signatory" of the companies tied to Nirav Modi, the billionaire jeweller also believed to be at the centre of the fraud.

All three will appear in a Mumbai court later on Saturday, the source said.

The invesgitation and "examination of others is continuing," the source said.

(Reporting by Aditya Kalra and Manoj Kumar; Editing by Kim Coghill)