A fugitive Indian billionaire wanted in connection with a massive bank fraud is seeking asylum in Britain, according to a report.

Nirav Modi, whose jewellery empire counted celebrities such as Naomi Watts and Kate Winslet among its clients, is accused of involvement in defrauding Punjab National Bank (PNB), India's second-largest state-run lender, of $1.8 billion (Dh6.6bn).

The Financial Times newspaper reported on Sunday that Mr Modi, 47, who has been on the run since the scandal broke in February, had sought asylum in Britain for what he called "political persecution".

The report quoted sources in Britain and India, but there was no official confirmation from either country.

If confirmed, Mr Modi would be the second Indian billionaire to seek sanctuary in Britain from legal action in India for alleged financial wrongdoing.

The Indian government is currently seeking the extradition of liquor tycoon Vijay Mallya, who fled to Britain in 2016, over unpaid loans to his Kingfisher Airlines.

Indian authorities are investigating Mr Modi and his uncle and business partner, Mehul Choksi, also a diamond merchant, for allegedly defrauding PNB of 2.8 billion rupees (Dh161 million).

PNB said in February that Mr Modi and Mr Choksi had defrauded it by raising credit with international branches of other Indian banks, using illegal guarantees provided by rogue PNB employees.

Investigators have arrested 25 people for enabling the scam with forged documents.

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Mr Modi ran a chain of jewellery stores with outlets in major cities around the world and was ranked 85th on the Forbes list of richest Indians in 2017, with a fortune worth $1.73bn.

The PNB came to light as the Indian government tries to reduce crippling debts accumulated by state-run banks.

PNB last month posted a record quarterly loss for an Indian lender. The bank reported a net loss of 134.17 billion rupees from January to March, compared with a 2.62 billion rupee profit in the same period last year.

The losses were largely a result of having to set aside funds to pay other banks for the illegal guarantees issued in the Nirav Modi scam.