Abbas Gokal, 60, and his two brothers had run up a $1.2bn (pounds 770m) debt to the bank when it folded in July 1991, said Anthony Hacking QC, prosecuting.
Mr Gokal had operated a massive swindle involving corrupt officials, secret global bank accounts, vast numbers of fake documents and other people's money to fund a lavish lifestyle, he alleged.
A false document factory was set up in BCCI's City of London headquarters in Leadenhall Street to feed the fraud, the court heard.
A sham financial structure was created "which was used as a screen to deceive the outside world as to what was really going on between him and BCCI", Mr Hacking told the court.
Mr Gokal, 60, has denied conspiracy to defraud and conspiracy to account falsely between 1985 and 1991.
He ran a collection of companies from Geneva and London called the Gulf Group, according to the prosecution.
Bribes were paid to three of the BCCI officers involved in the fraud, routed through bank accounts that Mr Gokal controlled, the prosecution alleged.
Documents signed by him were found by the Serious Fraud Office in a safe deposit box in the City of London "which showed that he and his two brothers owned and controlled the companies involved in the frauds", said Mr Hacking.
"They show that he and his two brothers incurred $1.2bn of debt owed to BCCI. There was no real security. BCCI had not got any real security in this extraordinary situation. This was a big factor leading to the closing and collapse of BCCI.
"We say the Gulf Group and Gokal himself had a dishonest relationship with senior officials of BCCI going back to the Seventies. Within that relationship, Gokal and the Gulf Group secretly received millions upon millions of dollars from BCCI in the Eighties," said Mr Hacking.
After the collapse, most of the conspirators went to Pakistan where they were safe because there was no extradition treaty with Britain, the court heard.
Mr Gokal also went, but in December 1994 caught a plane travelling from Pakistan to the United States which put down in Frankfurt to refuel. Mr Gokal was arrested and extradited to Britain. The trial is expected to last six months.Reuse content