He is accused of stealing more than $11m during his three years in office, Reuters news agency reports.
Mr Banda, who was stripped of presidential immunity earlier this month, was questioned for nearly three hours before being freed on bail.
The former president denies the charges and says he is the victim of a witch-hunt. He is due in court on Tuesday.
Shortly after being released, Mr Banda addressed his supporters, telling them to remain calm and that he would win the case in court.
The former leader lost 2011 elections to Michael Sata, whose government is investigating several high-profile deals made by Mr Banda's administration amid accusations of corruption.
Mr Banda led Africa's top copper producer from 2008 to 2011.
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