Examiner Bureau | Srinagar:
The Enforcement Directorate (ED) has provisionally attached 11 immovable properties worth Rs 10.63 crore in Srinagar and Bandipora in connection with an alleged Rs 32-crore fraud involving loans sanctioned under the Prime Minister’s Employment Generation Programme (PMEGP).
The attachment was ordered by the ED’s Srinagar Zonal Office under Section 5(1) of the Prevention of Money Laundering Act (PMLA). The properties, comprising land and buildings, were allegedly acquired or developed using proceeds generated through the diversion of loan funds.
According to an ED statement, the investigation revealed that 270 term loan accounts and an equal number of working capital accounts had been opened under the scheme at two branches of Jammu and Kashmir Bank — Sumbal and Gamud Gadkhud. All 540 accounts had subsequently turned into non-performing assets (NPAs), with outstanding dues of approximately Rs 32 crore.
The agency initiated its money laundering investigation on the basis of two FIRs registered by the Anti-Corruption Bureau (ACB), CBI, Srinagar, alleging misappropriation of PMEGP loan funds through a conspiracy involving borrowers, bank officials and private individuals. A fresh FIR was also registered by the CBI’s ACB in June 2026.
During the investigation, the ED conducted surveys at the two bank branches under Section 16 of the PMLA, which reportedly revealed the extent of the loan defaults and suspected irregularities in the sanction and utilisation of funds.
The ED alleged that loans were fraudulently obtained by projecting fictitious beneficiaries as PMEGP applicants and submitting forged invoices purportedly issued by non-existent firms and companies. The alleged operation involved private brokers, suppliers and bank officials.
Investigators found that loan proceeds were routed through multiple bank accounts to conceal their movement. While a portion of the funds was allegedly used to purchase properties and finance construction and renovation activities, the remaining amount was siphoned off.
The agency identified Hilal Ahmad Wani and others as key alleged players in the scheme. According to the investigation, borrowers were persuaded to apply for PMEGP loans using their KYC and other documents, while fabricated invoices from non-existent firms were submitted to facilitate loan sanctions in alleged collusion with bank officials. These firms were reportedly registered in the names of suppliers-cum-brokers or their family members.
The ED said it had so far traced proceeds of crime amounting to Rs 11.37 crore. Part of the money was allegedly channelled into assets held in the names of family members of those involved, while a substantial portion was siphoned off.
The 11 provisionally attached properties are held or controlled by suppliers, borrowers, brokers and a bank official. The attachment has been made to prevent the suspected proceeds of crime from being transferred or otherwise dealt with during the ongoing investigation.
PMEGP is a credit-linked government scheme aimed at promoting self-employment by providing financial assistance for the establishment of micro-enterprises. The ED’s investigation concerns alleged financial irregularities in the implementation of the scheme in the region.
