Confirming the development, a top official attached to the bank fraud and securities cell of CBI said the investigative agency has already started interrogating him after arresting him. The CBI is questioning him about the entire gamut of deals he has been involved in.

``We have arrested him for defrauding the bank,'' said the CBI official. The CBI raided the stockbroker's premises on Friday morning after registering a case against him for allegedly defrauding BoI.

Earlier, speculation surrounding Parekh's arrest led to all-round selling on the BSE and the NSE. At close of trade on Friday, the Sensex lost 147 points and the Nifty 47 points.

The CBI sources said soon after the case was registered on Friday morning, sleuths of CBI's bank and fraud cell swooped down on the residential and official premises of the bull operator in western Mumbai. The CBI has also added some BoI officials' names in the chargesheet.

While the raids were continuing, the agency personnel and the bank officials were busy estimating the actual amount he had defrauded, the sources added.

The first information report (FIR) was registered after BoI filed a complaint with the cell on Thursday evening saying that Mr Parekh had defrauded the bank.

The FIR was filed in a designated court in the city. Mr Parekh will be produced in court Saturday morning.

Mr Parekh is being questioned for his links with Madhavpura Bank, which issued him pay-orders. BoI, which paid Parekh money against the pay-orders, has failed to get its money back after the pay-orders were dishonoured, and is now asking Mr Parekh to pay up. The CBI also grilled him about his involvement in insider-trading, price-rigging and circular trading.

The CBI charge-sheet comes a week after some of Mumbai's top brokers, including Parekh, were raided by officials of the Income-Tax department.

It is believed that the charges filed against Mr Parekh by the CBI includeinsider trading and distorting the lending mechanism of Stock Holding Corporation of India.