Mr Chitalia is Gitanjali group's vice president for banking operations and had been named by other company officials as the group's key official who told them to prepare documents to get the letters of undertaking from the Punjab National Bank.
According to the Central Bureau of Investigation or CBI, the government-run PNB official Gokulnath Shetty would return these documents to top company officials after issuing the letters that enabled billionaire jeweler Nirav Modi and his uncle Mehul Choksi's companies to get credit abroad.
Mr Chitalia was stopped at the airport and brought to the CBI office at the Bandra-Kurla Complex for questioning, a CBI official said.
The Rs 12,636-crore fraud was allegedly committed by Nirav Modi and Mehul Choksi, the promoter of Gitanjali Gems.
Mr Choksi and Mr Modi allegedly got Letters of Undertakings (LoUs) and Foreign Letters of Credit (FLCs) of Rs 12,636 crore issued in favour of foreign branches of Indian banks based on fraudulent claims.
The accused officials of PNB did not enter the instructions for these LoUs and in their internal software to avoid scrutiny.
They were sent through an international messaging system for banking called SWIFT, which is used to pass instructions among banks globally to transfer funds.
A LoU is a guarantee which is given by an issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant.
In case of default, the bank issuing the LoU has to pay the liability to the credit giving bank along with accruing interest.
With inputs from PTI