The reports come amid government vows to clamp down on corruption in a bid to revive an economy devastated by decades of international sanctions.
President Hassan Rouhani warned Monday that corruption poses a threat to the Islamic republic, pinning the blame on monopolies.
The suspects embezzled from the Kerman branch of Tejarat Bank from 2009 until their arrest in 2013, Shargh newspaper quoted local prosecutor Yadollah Movahed as saying.
Media said most of the 130 billion rials embezzled had been retrieved and returned to the bank in Kerman, in southern Iran.
Tejarat was quoted as saying shareholders and clients were not undermined in any way.
Those arrested included two officials of the Kerman branch, considered to be the prime suspects, as well as other employees and some clients, media said.
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Four people were released on bail, according to Movahed.
Iran is considered one of the world's most corrupt places. It was ranked 136th out of 175 countries on Transparency International's corruption index for 2014.
The main offences include the payment of bribes to facilitate trade in a country where state institutions, such as the military, control businesses ranging from telecoms to oil sales.
Earlier this week, Intelligence Minister Mahmoud Alavi said three former government officials had been arrested in connection with fraud that occurred in 2011 and 2012.
Since Rouhani took office in August 2013, several prominent graft cases have come to light.
Mohammad Reza Rahimi, first vice president under former president Mahmoud Ahmadinejad, was sentenced to prison and fined, Iranian media reported in September.
And in May, a businessman convicted of masterminding a $2.6 billion banking scam, the biggest fraud case in Iran's history, was hanged.