The court said it is satisfied that there are enough grounds against the bail.
"There continues to be a real, substantial risk that the applicant [Nirav Modi] would fail to attend court or interfere with witnesses," Judge John Zani said as quoted by Hindustan Times.
"This case involves, by any footing, a very substantial fraud allegation... not one where bail can be granted and the application is refused," it added.
Modi, the prime accused in the PNB scam, is in Wandsworth prison on the outskirts of London.
Nirav Modi and his uncle Mehul Choksi are the prime accused in the Rs 13,000-crore Punjab National Bank scam involving fake guarantees in the name of the state-run lender to secure loans overseas.
Modi and his uncle Choksi left the country in 2018 before the CBI registered a case against him.