London (CNN)UK police have arrested India's billionaire diamond dealer Nirav Modi in London over his alleged involvement in a bank fraud that could be worth $2 billion.
Modi was arrested Tuesday on "behalf of the Indian authorities," according to a statement from London's Metropolitan Police. His plea for bail was later denied and he was remanded in custody until March 29, according to Westminster Magistrates' Court.
Punjab National Bank, one of India's largest, reported fraudulent activity at one of its branches more than a year ago.
India then issued an Interpol Red Notice for Modi's arrest and London authorities were asked to proceed with it, said a spokesperson for India's Enforcement Directorate. The Indian foreign ministry said in a statement it welcomed the arrest, and would seek to extradite Modi as soon as possible.
Modi and officials at the bank allegedly issued fraudulent Letters of Undertakings to overseas banks to obtain buyer's credit, according to India's Central Bureau of Investigation (CBI).
"Investigation further revealed that the fraud was allegedly perpetrated despite the knowledge of senior officials of Punjab National Bank, who did not implement the circulars and caution notices issued by the Reserve Bank of India regarding safeguarding the SWIFT operations and instead, misrepresented the factual situation to RBI," according to a statement from the CBI last year.
The CBI has raided dozens of offices and seized property worth millions of dollars belonging to Modi, who denies all wrongdoing. He has already been charged by the bureau for criminal conspiracy, fraud and corruption.
Forbes once ranked Modi as India's 85th richest man, with a net worth of $1.8 billion.
His arrest may have an impact on upcoming Indian elections due to take place in May.
The discovery of the alleged fraud and Modi's refusal to return to India to face criminal charges has increased pressure on Prime Minister Narendra Modi -- no relation to Nirav Modi -- who promised to fight corruption in India.
Tuesday's arrest and the possibility of extradition could help to improve the Prime Minister's tarnished image.
Rahul Gandhi, leader of the principle opposition party Congress, has repeatedly attacked PM Modi on his failure to bring fugitives back to India.
In 2016, liquor baron Vijay Mallya left the country owning an estimated $1.6 billion to 17 Indian banks.
The process for Mallya's extradition to India is ongoing. He has denied fleeing the country over his debts and described charges of fraud and money laundering as "false, fabricated and baseless."