Dr Dinesh Koul, posted by RAW in RS Pura Sector of Jammu region, along with two others - Rinku and Sehdev - who acted as his conduits, were allegedly extorting money from a youth by threating to implicate him in some false cases.
The CBI arrested all the three last night and produced them before a court.
Koul, had allegedly demanded a bribe of Rs 1.2 lakh from the youth and also threatened him with dire consequences if he failed to make the payment.
Research and Analysis Wing (RAW) is the external intelligence agency of the country.
The youth, whose identity has been kept a secret, went to CBI and lodged a complaint following which the agency laid a trap and caught Koul when he was allegedly accepting a part payment, the agency claimed.
"We want to unravel the entire racket and more arrests are likely to follow," a CBI official said.