BCCI exposed itself to such a huge extent keeping Mr Gokal's shipping and trading empire afloat that if it went into liquidation the consequences for the bank would have been "terrible", said counsel, who added: "He had them over a barrel."
It is alleged that Mr Gokal, in a massive international fraud with top BCCI officials, defrauded the bank's depositors out of $1.2bn (pounds 774m). BCCI was closed in July 1991 by the Bank of England and this also meant the end of Mr Gokal's business - the Gulf Group.
The huge scale of the fraud, the biggest to be brought to court, then became apparent.
Counsel said that in 1985 BCCI began pressing Mr Gokal to scale down his losses as it was having trouble keeping the bank's auditors at bay and disguising the huge hole in the accounts.
Notes from a meeting between BCCI officials and Mr Gokal were read to the court.
A bank official tells Mr Gokal: "You have wronged and hurt us a lot. How can you sleep at night? You are continually blackmailing us. Your demands continue to average pounds 1m a day. These are not our funds. They have to be returned.
"For God's sake do something about it. You have such a callous attitude. If this thing explodes everyone will be affected. I am fed up, at my wits' end. Never in my life have I known such a fiasco."
The official said Mr Gokal had given the bank "false and misleading" information which hoodwinked it into helping him.
The court heard that Mr Gokal had created a huge fraudulent business empire.
"The Crown say that Mr Gokal used vast sums he defrauded to sustain his lavish lifestyle around the world to provide personal benefit and gain for himself and his close family," said counsel.
Mr Gokal, a Pakistani, who was based in London and Geneva, denies conspiracy to account falsely and conspiracy to defraud between January 1985 and July 1987.
"Millions of dollars were flowing back and forth between Mr Gokal's companies and BCCI. There were a large number of companies through which the funds flowed. He misused ordinary employees and duped them into signing false documents to deceive on a massive scale," counsel said.
He went on: "There was an elaborate system of co-operation between him and BCCI."
The hearing continues.