Detectives from Banking Fraud Unit on Tuesday arrested former Chase Bank chairman Zafrullah Khan.
Khan was picked up from his Nairobi home before being locked up at Kileleshwa police station.
He will appear in court on Wednesday to answer to charges of money laundering and theft of money.
Banking Fraud Unit head Ngatia Iregi confirmed the arrest but declined to reveal further details.
Khan is among seven senior bank managers whom the Director of Public Prosecution Keriako Tobiko authorised their prosecution over the collapse of the bank.
The bank was placed under receivership for 12 months after experiencing “liquidity difficulties” a loss of Sh686 million for the financial year 2015.
Managing director Duncan Kabui and chairman Zafrullah Khan resigned following public concerns over the health of the bank.
A court heard that the former Zafrullah bought his wife Shehla Khan a vintage Ferrari Dino for USD 455,000 (Sh45,500,000).
It also emerged that he bought his wife a limited edition Chevrolet Corvette for $127,551 (Sh12,755,133 ) using Chase Bank funds without following due process.
