An Indian-born American lawyer who fled the United States after he was charged in a $600-million bank fraud case has been arrested in southern India, the country's top investigative agency said yesterday.

Gaya Gayatrinath charged by a US court for conspiracy to commit bank fraud, mail fraud and wire fraud was arrested on Friday in Bangalore, said G. Mohanty of the Central Bureau of Investigation.

Gayatrinath, 59, was detained on an arrest warrant issued by the US District Court in Manhattan in May 2002, Mohanty said. "His extradition proceedings will start now."

Gayatrinath worked for Allied Deals Inc., a New Jersey-based group of metal companies. He was charged with stealing more than $600 million from banks worldwide.

Four top executives of the group, including its head Narendra Kumar Rastogi, are already facing trials in New York. If convicted they could get five years in prison.

Rastogi and his aides falsely told banks they were using loans to pay metal suppliers when they allegedly wired the money to accounts in India and other countries for their own use, according to papers filed in the US court.

They allegedly fabricated collateral and set up phony business transactions to get the loans from J.P. Morgan Chase & Co., Fleet National Bank, PNC Bank, Chinatrust Bank and others.

Rastogi and his brothers, who operated more than 60 companies in different parts of the world, also face charges in India and Britain, Mohanty said.

The Indian government is seeking extradition of Rastogi's younger brother, Virendra Kumar, who is based in London, he said. Another brother, who operated from the Gulf, was recently deported to India.

On Friday, police in Bangalore produced Gayatrinath in a local court, where the judge granted him bail on the condition that he reports in daily at the police station. The court ordered him not to leave the country and asked police to confiscate his passport.

A CBI official in Bangalore said Gayatrinath came to India in May 2002 to attend his father's funeral, but didn't return to the United States.