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 comprise land and buildings allegedly acquired or developed using proceeds generated through the fraudulent diversion of PMEGP loans.
According to an ED statement, the investigation uncovered 270 term loan accounts and an equal number of working capital accounts linked to the scheme at two branches of Jammu and Kashmir Bank — Sumbal and Gamud Gadkhud. All 540 accounts had 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 that PMEGP loan funds had been misappropriated 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, surveys conducted at the two bank branches under Section 16 of the PMLA revealed the extent of the loan defaults.
The ED alleged that loans were fraudulently obtained by projecting fictitious beneficiaries as PMEGP borrowers 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 the loan proceeds were transferred through multiple bank accounts to conceal their movement. A portion of the money was allegedly used to purchase properties and finance construction and renovation work, while 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 registered in the names of suppliers-cum-brokers or their family members were submitted to facilitate loan sanctions in alleged collusion with bank officials.
The ED said its investigation 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 had been siphoned off.
The 11 properties, held or controlled by suppliers, borrowers, brokers and a bank official, have been provisionally attached to preserve the suspected proceeds of crime during the investigation.
The ED action relates to alleged financial irregularities in the implementation of PMEGP, a government scheme aimed at promoting self-employment through credit-linked assistance for setting up micro-enterprises.
