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Ricardo Salgado, the former boss of the Portuguese bank Banco Espirito Santo (BES), has been placed under house arrest after questioning over the bank's collapse.
His lawyer described the move as "disproportionate".
At a parliamentary hearing in December he denied any wrongdoing.
Mr Salgado was last week questioned by a state prosecutor over fraud, corruption and money laundering allegations. He is one of six people facing the accusations.
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Once the country's biggest private lender, BES collapsed after reporting record losses.
Under a government bailout plan, BES's good assets were transferred into a new bank called "Novo Banco" as part of a bailout from the Portuguese government. It was loaned €4.9bn (£3.5bn).
The country itself had only recently emerged from a three-year rescue plan.
Source: BBC