Police detained Rosbank CEO Vladimir Golubkov as he was accepting five million rubles ($160,000) of $1.5 million bribe through an intermediary, Rosbank's Senior Vice-President Tatiana Polyanitsyna.
"The bank's chief executive demanded $1.5 million from a company representative to prolong a loan agreement and to sign an additional agreement with reduced interest rates and monthly payments.
He asked the businessman to deliver the money through his intermediary, Rosbank's senior vice-president," the ministry said in a statement.
The entrepreneur reported Golubkov to the ministry. Police later documented the receipt of five million rubles by the bank's senior vice-president.
After she was detained, Polyanitsyna admitted the money was destined for the bank's management and agreed to collaborate.
"Later, police, with the support of the special rapid response force, detained the bank's board chairman red-handed in his office as he was receiving the money from the intermediary," the interior ministry said.
A video released on YouTube showed men dressed in black swiftly entering Rosbank's premises and heading for Golubkov's office.
The video showed the chief executive surrounded by the police, sitting in his armchair and nervously adjusting his tie, with bundles of 5,000 ruble banknotes laid on his desk.
Golubkov demanded the money "for a trip to Paris", police said.
"Golubkov demanded the money be paid immediately by the head of the commercial structure, explaining the urgency by saying he needed to arrange and pay for a trip by the bank's management to Paris.
"The entrepreneur did not have such a sum of money and no-one was offering him a deferment (of the loan), so he had only one way out - to turn to the police, and this is what he did," a police source said.
Rosbank confirmed a police investigation was underway at the bank.
"Rosbank confirms that police investigations are taking place at its headquarters in Moscow concerning two officers. Rosbank management is cooperating fully with the authorities to help clarify the situation.
"This does not affect Rosbank activities or clients operations. The bank is operating under the interim management of Igor Antonov, first deputy CEO of the management board of Rosbank."
Golubkov, 48, has headed Rosbank since September 2008. Rosbank is one of Russia's top three retail banks, servicing over three million private clients, according to the bank's website.
Societe Generale acquired 20 percent minus one share of Rosbank in 2006 with an option to take control of Rosbank.
In February 2008, Societe Generale exercised its option to gain a controlling stake in the bank.