Scarborough Building Society has suspended its finance director after an investigation "into the use of" £103,000 of funds from an external bank account.
The building society, which holds 250,000 customer accounts, said it took the action on Friday and police were now carrying out their own inquiry.
The Scarborough said none of its members' accounts were involved.
In a statement to the London Stock Exchange, the building society said: "Scarborough Building Society confirms that its finance director, Gerald R Waterworth, was suspended on Friday, 8 February.
"This follows an investigation it launched into the use of funds, totalling £103,000, from an external bank account held by the society for administrative expenses.
"No other society employee is involved in the investigation."
Chief executive John Carrier insisted that it was a case of "business as usual" at the society despite the suspension.
He said: "The important point to stress is that while we do not want to trivialise the matter, the amount involved is very small in relation to our profits, capital and assets."
Scarborough Building Society has assets of £1.2 billion, and its last full-year accounts show it had pre-tax profits of £7 million and capital of £74 million.
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