Satnam Kaur, 30, from Aberdeen and a former Royal Bank Of Scotland employee, was alleged to have taken cash from two accounts while working as a customer advisor for the bank, BBC reported.
She was due to go on trial over the allegations, but the case was dropped because the document submitted by the bank at Aberdeen Sheriff Court failed to show that the case had been officially authorised by Scotland's top legal officer.
The words "by authority of Her Majesty's Advocate" were missing.
According to the report, Kaur allegedly withdrew money as euros and deposited a 120,000 pounds cheque into her own account. She was sacked from the job after the incident came to light in April 2011.
Depute fiscal Elaine Ward told the court that the prosecutor believed Kaur was going to plead guilty, and so had not fully prepared for the trial.
Prosecutors are legally bound to bring a criminal case against an accused within 12 months. In Kaur's case time bar ran out Oct 18. Ward sought extension of the time to prepare a new indictment to serve on the accused.
Sheriff Graeme Buchanan refused to entertain the case, stating that the crown had shown a "lack of focus and direction".