Gurgaon/New Delhi: Citibank manager Shivraj Puri, accused of cheating the bank's customers, surrendered before police and was taken into custody on Thursday even as the quantum of his alleged fraud was raised three times to Rs.300 crore ($65 million).

"Puri surrendered around 12.30 p.m. He has been taken into custody and will be presented before the court," Gurgaon Police Commissioner S.S. Deswal said, adding that more arrests may be made after Puri's interrogation in what is being called India's biggest banking fraud.

"Notices have been issued to the banks to seize all the accounts. We have formed five special teams to investigate the case. And we are hot on Puri's trail," said Deswal.

According to police, firms belonging to the Delhi-based Hero group invested Rs.200 crore in Puri's account and Rs.100 crore were invested by individuals. Puri, in turn, invested the money in five major brokerages, including Religare, Okaya and Bonanza.

Some 40 teams have also been constituted to track some 81 accounts into which the 32-year-old accused is alleged to have deposited the money. The police is also probing a brokerage Norway Martin, purportedly owned by the father of the accused.

Puri reportedly managed to con high net worth investors after forging documents, which he said was from the watchdog Securities and Exchange Board of India (SEBI), to offer lucrative returns which he claimed had Citibank's backing, the olice said.

The watchdog denied the existence of schemes made popular by Puri, who claimed on Thursday he had done no wrong.

Working as the bank's relationship manager, Puri allegedly cheated investors by asking them to deposit money into accounts managed by him, promising to invest it in schemes that offer very high interest in a short span of time.

Since the task of opening new accounts had been assigned to him, he managed to dupe many people without the bank's knowledge. Police and bank sources had on Wednesday estimated the fraud to be of Rs.200 crore, up from the Rs.100 crore figure cited by police on Tuesday.

Puri had been on the run since then.

Given the large size of the alleged fraud, Finance Minister Pranab Mukherjee had termed it as an act of 'individual misdemeanour' on Thursday and had sought to assure people that there was no systemic failure, with people's money remaining safe in banks.

"There are regular regulations and all other precautions are being taken," Mukherjee told reporters outside his North Block office on Wednesday. He was asked for his comments on the Citibank executive, booked for allegedly siphoning off crores of rupees.

"If there be any individual misdemeanour that has to be acted on, law will take its own course of action," the finance minister added, seeking to assuage people at large who have money deposited in banks.

Citibank also said it was investigating the fraud but assured customers that their money was safe.

"Identified suspicious transactions have been isolated. Citi India is providing full assistance to the authorities in their investigations," the bank said in a statement.

"This issue does not impact other accounts, transactions or customers of the bank."

Incidentally, in a circular issued on November 29, the Reserve Bank of India (RBI) had asked people to exercise due caution and be extra vigilant over schemes - shown as having regulatory consent on forged documents - that were offering high interest rates.

"The Reserve Bank has further stated that all complaints relating to unauthorised acceptance of monies and running of money circulation schemes should be referred to the economic offences wing of the concerned state governments," the central bank said.

"Money circulation schemes are banned under the Prize Chit and Money Circulation Schemes (Banning) Act, 1978 and the respective state governments have the power to take action against the persons involved in such schemes."