The cooperative bank had collapsed in 2001 landing over 10,000 depositors in financial difficulties. Fearing arrest, Rao had fled to Bangkok.

Rao, a native of Krishna district in coastal Andhra, was arrested in Bangkok by the Interpol in 2005 and was extradited to India in June 2006.

His relatives, the bank's vice-chairman, K. Venugopal and sister K. Sunita were arrested earlier.

Rao denied he was getting 'VIP treatment' in the jail. 'I was provided facilities for doing physical exercise and these are given to all prisoners on request,' he said.

Rao, who was sharing the cell with disgraced Satyam Computers founder B. Ramalinga Raju and other accused in the Rs.78 billion accounting fraud in the IT major, said he knew Raju only as co-prisoner.

He said he had no plans to reopen the bank and would announce his future plans soon.