THE Bank of Credit and Commerce International transmitted money to Palestinian terrorist Abu Nidal in an effort to foster goodwill in the Arab world, it was reported.The disclosure by a former high-ranking BCCI official supports a perception that the Arab-owned bank, already under investigation as a money-laundering vehicle for drug dealers and other criminals, also was an instrument of Arab foreign policy. In interviews with the Los Angeles Times under strict security at a London hotel, the official said British weapons secretly destined for the terrorist's arsenal were financed through BCCI offices. Ghassan Qassem, a BCCI officer who served as Nidal's personal banker told the Times: "During the Iran-Iraq war, the bank wanted to show the Arab world that we supported Iraq and we did that through support of Abu Nidal for several years." The Times cited other evidence that BCCI profited from associations with a number of arms traders and individual terrorists and terrorist groups. Bank regulators around the world closed many of BCCI's branches in July after auditors uncovered evidence of widespread fraud and losses of $5 billion or more. The bank is under scrutiny by criminal investigators in Britain and five US cities.