Police had detained the servant Anil on the the day of the incident and he was formally arrested today after the help confessed to his crime, SSP K Emanuel said.
Anil was arrested on the basis of a letter posted by the 62-year-old cloth trader Lalit Kumar Maheshwari to police before his murder.
Maheshwari had expressed fear in the letter that Anil has been demanding Rs 50 thousand from him, failing which he could become a threat to his life, he said.