Fugitive diamond trader Mehul Choksi has been arrested in Belgium following an extradition request from India, authorities in New Delhi said on Monday.

The 65-year-old is accused of being involved in an alleged fraud of nearly $1.8 billion (€1.58 billion) against India's second-biggest state-run lender by assets, Punjab National Bank (PNB), in 2018.

Other alleged perpetrators in the scam include Choksi's nephew and fugitive celebrity jewelry designer Nirav Modi, other family members and employees of their jewelry firm, as well as some bank officials.

The largest bank scam in India's history

The scam allegedly involved using forged documents to raise credit to buy and import jewels.

It was considered to be the largest bank scam in India's history.

However, Choksi had left India before the scandal came to light.

Indian authorities believe Choksi is likely to challenge his extradition and seek bail on medical grounds.

Nirav Modi also implicated

Choksi's nephew, Nirav Modi, is also awaiting extradition from London after the UK authorities arrested him in 2019.

The son of a diamond merchant, Modi built an international empire and opened luxury jewelry stores in several major cities around the world.

He also catered to a host of celebrity clients, including actresses Naomi Watts, Kate Winslet and Priyanka Chopra-Jonas.

In 2017, before the alleged fraud, Forbes estimated Modi's wealth to be $1.73 billion.

Nirav Modi shares the last name with India's Prime Minister, Narendra Modi, but the two men are not related.

Edited by: Zac Crellin