Zhai Changping, who worked at the bank's Dalian branch in Liaoning, was arrested last Monday following the issue of a nationwide warrant, Xinhua quoted the police as saying Sunday.

He allegedly embezzled the money since 1999 while working as a data input clerk, the police said.

Officers did not say how he managed to accumulate so much money, only saying the matter is still being investigated.

The case was first reported in January. Zhai fled to northeastern Heilongjiang, where he was arrested. He has been sent back to Dalian.

The arrest followed another scandal at the bank in which two people jumped to their deaths in Heilongjiang's Harbin city after massive embezzlement was discovered, according to state media last month.

One of the two who committed suicide was the wife of Zhang Xiaoguang, the former chairman of highway company Northeast Expressway who has been detained on suspicion of having embezzled up to 300 million yuan (HK$283 million) of his company's money.

The 300 million yuan may only be the tip of the iceberg because another 700 million yuan deposited by other companies at the same branch cannot be accounted for, media reports said.

Two senior Bank of China officials have gone missing and are believed to have fled the country since the scandal.

In another recent case, Gao Shan, an official at the bank's Hesong branch in Heilongjiang, fled overseas after secretly transferring US$120 million this year, state media had reported.

Experts have said the lack of effective supervision of China's banks allow bank managers and other employees to essentially run the institutions as fiefdoms, giving out loans to unworthy friends and pilfering funds.

The case had prompted China's banking watchdog to urge the bank, one of China's four leading state-owned commercial banks, to step up risk controls before its planned high profile stock exchange listings at home and overseas this year.

The government plans to offer shares in Bank of China and China Construction Bank as part of a wider effort to reform the banking system.

Zhang Enzhao quit as Construction Bank chairman this month for ``personal reasons'' amid corruption allegations.

A Beijing-based company has accused him in a civil suit in a US court of taking a US$1 million bribe from a firm seeking to sell software to the bank.AGENCE FRANCE-PRESSE