J&K Bank loan fraud: ED attaches 11 properties worth Rs 10.63 crore

The Enforcement Directorate has provisionally attached 11 properties worth Rs 10.63 crore in Srinagar and Bandipora in an alleged PMEGP loan fraud case involving J&K Bank officials, suppliers and brokers. Investigators have traced proceeds of crime worth Rs 11.37 crore

Srinagar: The Enforcement Directorate (ED) has attached 11 properties, including buildings and plots, worth Rs 10.63 crore in Srinagar and Bandipora districts of Kashmir in connection with alleged irregularities in a Central government-funded employment generation programme, an official said on Monday.

The ED’s Srinagar Zonal Office has provisionally attached the immovable properties under the Prevention of Money Laundering Act (PMLA) in a case linked to the alleged misuse of the Prime Minister’s Employment Generation Programme (PMEGP), the official said in a statement.

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The assets attached by the ED were in the possession of suppliers-cum-brokers and officials of J&K Bank allegedly involved in the misuse of PMEGP, a Central sector credit-linked subsidy scheme, the statement said.

The ED investigation was initiated on the basis of two FIRs registered by the Anti-Corruption Bureau (ACB) and the Central Bureau of Investigation (CBI), Srinagar, alleging misappropriation of loans under the PMEGP scheme in a criminal conspiracy involving borrowers, bank officials of the Sumbal and Gamud Gadkhud branches of J&K Bank, and other unidentified persons.

The FIRs alleged that the accused cheated the bank, misappropriated funds, caused wrongful losses to the bank and made corresponding wrongful gains for themselves, the statement said.

The investigation revealed that PMEGP loans were obtained by projecting dummy borrowers and using fake invoices issued by non-existent firms and companies, allegedly in criminal conspiracy with J&K Bank officials at its Sumbal and Gamud Gadkhud branches and private individuals-cum-brokers. The CBI’s ACB also registered a fresh FIR in the matter in June 2026.

During the PMLA investigation, a survey conducted at the Sumbal and Gamud Gadkhud branches of J&K Bank under Section 16 of the Act revealed that 270 term loan accounts and 270 working capital accounts linked to the PMEGP scheme at the two branches had turned non-performing assets (NPAs). The outstanding NPA amount was found to be around Rs 32 crore, the statement said.

The suspected proceeds of crime generated from the scheduled offences were diverted through multiple transactions across bank accounts. A portion of the funds was allegedly used for the construction and renovation of properties and personal enrichment, the ED said.

The investigation conducted so far under the PMLA revealed that Hilal Ahmad Wani and others played a major role in fraudulently obtaining PMEGP loans by inducing beneficiaries to avail themselves of the loans, the ED said.

Using the borrowers’ KYC documents and other papers, along with fake invoices issued by non-existent firms registered in the names of suppliers-cum-brokers and their family members, the accused allegedly secured PMEGP loans in criminal conspiracy with J&K Bank officials, the ED said.

Investigations conducted so far have traced the generation of proceeds of crime (PoC) amounting to Rs 11.37 crore, the ED said.

These proceeds were diverted through multiple accounts, and a portion was used for the construction and renovation of properties held in the names of family members. A substantial portion of the proceeds was allegedly siphoned off, indicating the accused persons’ involvement in their diversion and concealment, as well as their possession and use, the ED said.

Accordingly, 11 assets held by or under the control of suppliers-cum-brokers and one bank official have been provisionally attached under Section 5(1) of the PMLA to safeguard the value of the proceeds of crime.