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

Srinagar, Nov 9: The Enforcement Directorate (ED) on Monday said it had provisionally attached 11 immovable properties worth Rs 10.63 crore in Srinagar and Bandipora districts in connection with the alleged misuse of the Prime Minister Employment Generation Programme (PMEGP).
In a statement, a spokesperson said the ED’s Srinagar Zonal Office had attached the properties under the Prevention of Money Laundering Act (PMLA), 2002.
He said the Provisional Attachment Order was issued in respect of 11 assets comprising land and buildings in Srinagar and Bandipora districts, which are allegedly in the possession of suppliers-cum-brokers, bank officials of J&K Bank and other persons involved in the alleged misuse of the PMEGP scheme.
“ED investigation was initiated on the basis of two FIRs registered by ACB and CBI, Srinagar, alleging misappropriation of PMEGP scheme loan amounts through criminal conspiracy between PMEGP borrowers, bank officials of Sumbal Branch and Gamud Gadhkhud Branch of J&K Bank and other unknown persons, who allegedly cheated the bank and misappropriated bank funds, causing wrongful loss to the bank and corresponding wrongful gain to themselves.”
The spokesperson said the investigation revealed that PMEGP loans were availed by projecting dummy borrowers, using fake invoices of non-existent firms/companies and in criminal conspiracy with bank officials, including those of Sumbal and Gamud Gadhkhud branches of J&K Bank, and private persons-cum-brokers. The CBI and ACB had also registered separate FIRs in the matter in June 2026.
He said a survey conducted at the Sumbal and Gamud Gadhkhud branches of J&K Bank under Section 16 of the PMLA revealed 270 term loan accounts and an equal number of working capital accounts pertaining to PMEGP scheme loans. The non-performing assets (NPA) amount was found to be Rs 32 crore.
“The investigation further revealed that proceeds derived from the scheduled offences were diverted through bank accounts in multiple transactions and utilised for construction, renovation of assets and personal enrichment.”
The investigation, carried out so far under the PMLA, revealed that Hilal Ahmad Wani and others played a major role in fraudulently availing PMEGP loans. Borrowers were allegedly induced to avail loans using KYC documents and other records, while fake invoices of non-existent firms registered in the names of suppliers-cum-brokers and/or their family members were used to secure loans in criminal conspiracy with J&K Bank officials.
The investigation traced the generation of proceeds of crime to the tune of Rs 11.37 crore. These proceeds were diverted through multiple bank accounts, and part of the amount was utilised for the construction and renovation of assets held in the names of family members.
A substantial portion of the proceeds of crime was also siphoned off, establishing the accused persons’ alleged involvement in their diversion, concealment, possession and use. Accordingly, 11 assets held under the control of suppliers-cum-brokers, bankers and one bank officer have been provisionally attached under Section 5(1) of the PMLA to safeguard the value of the proceeds of crime. Further investigation is underway. (KNO)