Dhaka: A Dhaka court on Thursday placed former North South University teacher Hasnat Karim, also a British national, and Canadian student Tahmid Hasib Khan on eight-day police custody for interrogation over July 1 Gulshan terror attack.

Earlier, police shown Hasnat Karim and Tahmid Hasib Khan arrested under section 54 on Wednesday night. ‘We can confirm that they were arrested under Section 54 of CrPC (criminal procedure),’ police spokesman AKM Shahidur Rahman, referring to a law under which police can detain someone for suspicion over any crime.

Police sought 10-day police custody for interrogating the survivors, who were missing after being grilled by police over the attack.

Police presented Hasnat and Tahmid before Dhaka Metropolitan magistrate Nurunnahar Yasmin’s court on Thursday afternoon and sought custody. The court conducted a hearing in this connection at about 3:00pm.

Police said Hasnat Karim, a British citizen of Bangladesh origin, and Tahmid Khan, a University of Toronto student, were arrested late Wednesday in connection with last month's siege in Dhaka when 20 hostages were murdered.

"We can confirm they were arrested under Section 54 of CrPC (criminal procedure)," police spokesman A.K.M Shahidur Rahman told AFP on Thursday, referring to a law under which police can detain someone for suspicion of any crime.

A court later remanded both men in custody for eight days, deputy commissioner of Dhaka police Aminur Rahman told AFP.

Karim and Khan were both inside the Holey Artisan Bakery when gunmen raided the cafe on the night of July 1, taking a group of mainly Western diners hostage and then killing 20 of them, along with two policemen.

But neither man has been seen in public since the end of the siege when commandos stormed the cafe in the capital's upmarket Gulshan neighbourhood on the morning of July 2.

The two men's families have said they were being held by security forces even though there was no evidence to link them to the attackers.

Police had denied the men were in their custody before announcing the arrest on Thursday.

- 'My son is innocent' -

Speaking to AFP after news of the arrest, Karim's father said his son had been used as a human shield by the attackers during the siege and that he had helped save lives during the ordeal.

"I have full confidence in the police investigation," said Rezaul Karim.

"My son was a hero. He saved the life of at least eight people during the siege. I know him. He is innocent."

Relatives say Hasnat Karim, his wife and two children were at the cafe to celebrate the 13th birthday of their daughter on the night of the attack.

Reports in local media said both men were being investigated for suspicious activity during the siege. They said Khan was seen holding a firearm and Hasnat Karim strolling with the attackers on the roof.

On Tuesday, the national police chief. A.K.M. Shahidul Hoque, told reporters that the two were "not out of suspicion" as their "behaviour and actions" during the siege were questionable.

Karim, 47, was a lecturer at Bangladesh's private North-South University in Dhaka, where two of the five attackers who were gunned down at the end of the siege had studied.

More recently, he had been working as a director at his father's engineering company in Dhaka.

The 22-year-old Khan, who is a Bangladeshi citizen, was back in his homeland while on leave from his university in Canada.

Police earlier this week named a Canadian citizen, Tamim Chowdhury, as the mastermind of the attack, offering a reward of up to $25,000 for any information leading to his arrest.

The siege at the Holey Artisan cafe was by far the deadliest in a string of attacks claimed by Islamist groups which have blighted Bangladesh over the last three years.

The Islamic State organisation claimed responsibility for the attack and the gunmen were all pictured posing with IS flags in images posted on a website affiliated to the group.

Prime Minister Sheikh Hasina's government has said however that the attack was the work of a homegrown Islamist group, insisting international jihadist groups have not got a foothold in Bangladesh.

Dozens of foreigners, rights activists and members of minority religious groups have been murdered by Islamist extremists in Bangladesh over the last three years.

Many of them, including victims of the cafe attack, have been hacked to death with makeshift machetes.