The Central Bureau of Investigation (CBI) registered the case against Electrotherm (India) Ltd. and others on a complaint filed by the bank.
The agency also conducted searches Tuesday at nine places in Ahmedabad, Gandhinagar, Vadodara and Kutch in Gujarat.
"It was alleged that Electrotherm and its directors along with other public servants of Central Bank of India entered into a criminal conspiracy and cheated the Central Bank of India to the tune of Rs. 436.74 crores," said a CBI official.
The company had requested the bank for credit to enable it to supply steel and iron to a firm in Tanzania, the complaint said.
"The company did not submit any proof of delivery of the material and defaulted on the loans taken. Also, standby letters of credit opened by the bank to facilitate trade in machinery and coal devolved. The bank had to make payment when the company failed to pay the counter party," said the official.
The company had allegedly made false representations to induce the bank to extend credit facilities to it.