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).

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