Xinhua reported that the Deputy head of Iran's Central Bank has been arrested over an embezzlement scandal.

Mr Hamid Pourmohammadi was arrested together with another banking official over USD 2.6 billion fraud case, allegedly one of the biggest fraud cases in the history of the Islamic Republic.

Iranian prosecutor general Gholam-Hossein Mohseni-Ejei announced Thursday that Iran's judiciary arrested two more people over the embezzlement scandal, raising the total number of the detained to 33.

Mr Mohseni-Ejei, who was assigned on Sept. 15 to exclusively investigate the embezzlement case, did not reveal the names of the arrested people and said that legally it is impossible to publicize names of the arrested people unless their charges are proved by the court.

Regarding Mahmoud-Reza Khavari, the former CEO of Melli Bank, one of Iran's largest banks, who reportedly escaped to Canada after the embezzlement scandal was discovered, Mohseni-Ejei said that there are hopes that Khavari would return to the country in the following days.

Mohseni-Ejei said Tuesday that 31 people had been arrested and another 67 questioned for suspected links to the embezzlement case.

According to media reports, nearly USD 2.6 billion was swindled out of several Iranian banks in more than two years by a company named Amir Mansour Aria, whose owner took advantage of some governmental recommendations to purchase assets of some state owned enterprises, including Iran's second largest steel maker Khuzestan Steel Company.

Iranian Central Bank governor Mahmoud Bahmani said earlier that the owner also attempted to establish a bank but failed.

Reports said Ahmadinejad's chief of staff Esfandiar Rahim- Mashaei and some other entourages were involved in the financial scam. But the president strongly denied this and called on the judiciary to deal firmly with all people involved in the fraud.

The Iranian president also announced his government will start banking system reforms this year.

(Sourced from Xinhua)