An employee at HSBC's Bangalore call-centre has been arrested after more than £230,000 was stolen from the accounts of British customers.

Europe's biggest bank intends to launch separate legal proceedings against the man, who is believed to have sold confidential information on to a criminal gang.

A spokesman for the bank said: "HSBC will be assisting the Indian police with their investigation. We intend to pursue a conviction as aggressively as possible."

The amount of money taken is believed to be around £233,000 although the bank has said it is unable to confirm a precise figure.

The arrest was made after HSBC Electronic Data Processing India Ltd, which handles the bank’s back-office work, filed a complaint accusing Nadeem Kashmiri of accessing debit card information and passing it on to associates.

A spokesman said that the 16 customers affected had been contacted and would be reimbursed. He said that this was the first incident of fraud involving an employee since the bank opened its first Indian call centre four years ago.

HSBC now employs more than 6,000 people in India, one of many UK firms to offshore back-office functions to cut wage costs.

Sunil Mehta, vice president of NASSCOM - the trade body for the Indian IT and services sector - said the organisation would work with legal authorities in the UK and India to ensure any criminal breaches in security were promptly prosecuted.

"We believe that any case of theft or a breach of a customer’s confidentiality must be treated extremely seriously," he said.

The thefts will come as a particular embarrassment to HSBC, which has insisted that its customers are protected from identity theft.

Last year, when The Sun bought account details of 1,000 British customers for £3 a time from an IT worker in Delhi, the bank assured customers its call centre in Bangalore was secure.

At the time Richard Beck, head of group external relations at the bank, said: "We believe any information in relation to HSBC customers was accessed through other companies dealing with our customers in the course of their normal business, not from HSBC staff in India or elsewhere."

The reputation of the industry was further tarnished when Australian Broadcasting Corporation current affairs programme Four Corners was able to obtain not just the names and addresses of Australian customers but also telephone numbers, birth certificate details, Medicare numbers, driving licence numbers and ATM card numbers.

At the time Richard Pym, Alliance & Leicester chief executive, said that he considered it short-sighted of his banking rivals to relocate jobs to India.

"When you are dealing with banking, you want a high-security environment. The greater the geographic distance, the greater the risk. You can’t subcontract your relationships with customers."