Sub-Inspector Rajsekhar Pain of West Midnapore was arrested by the CID in connection with a case relating to misappropriation of Rs 45 lakhs from one businessman in the district, he said.
He was held from the Midnapore police lines.
The SI was the OC of Kharagpur police station when he had allegedly extorted the money from the complainant, the official said.
The CID had earlier arrested two police officers
An arrest warrant against Ghosh has been issued by the investigating agency, which had raided residences of the former IPS officer and the two police officers.
Gold jewellery, documents and a large sum of cash were seized from the residences of Ghosh.
Police carried out the raid following a court order, after a person complained that some police personnel had forcefully taken money from him last year, the official said.
Ghosh, who was the West Midnapore SP, resigned from the service after she was transferred to a less significant post - the commandant of the third battalion of the state armed police - in late December last year.
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