CBI sources said Mr Sinh has been arrested for alleged criminal conspiracy, cheating and misappropriation of funds related to Saradha Realty, one of the companies of the group which is being probed by the agency.
Mr Sinh is the first former Union Minister to be arrested by the agency in connection with the case.
The sources said Mr Sinh was called to the headquarter of Special Investigation Team in Kolkata where he was grilled by the team for over five hours before being arrested. Mr Sinh also, allegedly, named many bureaucrats and reportedly claimed he influenced them for many benefits including favourable postings.
Recently, the CBI has arrested Director of Saradha realty Shibnarayan Das whose interrogation has given some vital leads about the alleged role of Sinh in the Saradha realty which was used for duping thousands of gullible investors in the case, the sources said.
Mr Das, who was on the run, was apprehended in Kolkata and a fully-loaded 0.38 calibre revolver was seized from him.
Sources said it was Mr Das who had allegedly suggested to Sudipta Sen, the Chairman of Saradha group to start a chit fund company and lure investors to deposit in their schemes in 2008, promising attractive returns.
CBI sources said that after establishing the Saradha group on July 8, 2008, Sen had appointed Das as the Director and shareholder.
CBI has so far registered four cases against the Saradha Group in West Bengal on the directions of the Supreme Court.