An Indian Police Service officer was on Tuesday arrested in Hyderabad by Andhra Pradesh's Special Investigation Team for his alleged involvement in the multicrore fake stamp paper scam.

Narasimha Rao, a Rajasthan cadre IPS officer of 1989 batch, was produced before first Additional Metropolitan Sessions Judge Jaganath Reddy, who remanded him to judicial custody till March 8, the police said.

Rao's arrest was based on the confessional statements given by two police officers, arrested earlier, who worked under him in Central Crime Station during 2001. He had worked as DCP (Detective Department) in the city before his repatriation to Rajasthan last year.

A close relative of former state chief secretary C Arjuna Rao, the IPS officer was booked under A P Control of Organised Crime Act (APCOCA). The IPS officer was here on a personal visit. 

DSP Satayanarayan Reddy, arrested and remanded along with SI Madhu Mohan of CCS, is reported to have told the SIT that he only obeyed Rao's instruction during the investigation, SIT sources said.

They added that Rao was questioned on Monday for his alleged role in the investigation during 2001.

Reddy and Mohan were, arrested by SIT on Sunday for their alleged involvement in helping the agents of scam kingpin Abdul Karim Telgi in Hyderabad, were booked under the APCOCA.