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By Brian Ellsworth and Deisy Buitrago
CARACAS (Reuters) - The chairman of Venezuela's top bank Banesco on Friday condemned the arrest of 11 executives and a 90-day state takeover of the bank as locals thronged cash machines and sped up transfers to other institutions.
In the biggest crackdown on the financial sector since late leftist leader Hugo Chavez, the government of his successor President Nicolas Maduro said on Thursday it was targeting Banesco for "attacks" against the OPEC country's rapidly depreciating currency.
Banesco Chairman Juan Carlos Escotet suggested the bank was being used as a scapegoat for the looming failure of a currency overhaul designed to combat destructive hyperinflation.
Maduro has said he will knock three digits off the country's ailing bolivar currency by June 4, a Herculean undertaking that opposition economists say is unlikely to happen on schedule due to the complexity of distributing millions of new bills and adapting cash machines.
"There is a fundamental problem that might explain the disproportionate actions by authorities: the implementation of this currency plan. Is that why the government is taking over Banesco?" Escotet wrote in a letter posted on Twitter.
"Are they using a smokescreen to deviate attention from how to make their currency plan happen?"
Escotet, who lives in Spain, said he was in Venezuela after flying back from Europe overnight following the arrests.
In the letter, he urged Venezuelans not to withdraw their money from his bank - but his plea seemed to be falling on deaf ears.
In a dozen interviews with Reuters, Banesco clients said they feared the government was in fact expropriating the bank and that their money would disappear.
"I'm taking cash out now. And I've been transferring to my other account, not at Banesco, just in case," said Wilmer Sanchez, 47, who works as a security supervisor in a clinic, as he stood in a line of a dozen people.
"This is malice. They've been wanting to take over Banesco for a while," he said.
(Additional reporting by Brian Ellsworth in Caracas, Maria Ramirez in Puerto Ordaz and Anggy Polanco in San Cristobal; Writing by Alexandra Ulmer; Editing by Susan Thomas)