CBI probes alleged fraud at Syndicate Bank

NEW DELHI (Reuters) - The Central Bureau of Investigation (CBI) said on Tuesday it was investigating alleged fraud at the state-run Syndicate Bank amounting to about 10 billion rupees ($150 million).

Acting on a complaint from the bank, the CBI has registered cases against five bank officials and four others, it said in a statement.

It said it was conducting searches at 10 locations across three cities including New Delhi.

The suspects were believed to have discounted fake cheques and bills against fake letters of credit, and arranged overdraft limits against nonexistent life insurance policies.

Syndicate Bank did not respond to a request seeking comment. Its shares ended down nearly 2 percent, having dipped as much as 4.9 percent during the session.

The CBI is currently investigating allegations of money laundering at India's second-biggest lender, Bank of Baroda. The CBI said over the weekend that it had conducted searches at 10 locations.

Indian banks are on a drive to clean up their bad loans and have sharply increased provisions to cover loan losses.

($1=67.3800 rupees)

(Reporting by Aditya Kalra and Devidutta Tripathy; Editing by Clarence Fernandez and Kevin Liffey)