ED Attaches Properties Worth 10.63 Crore In Alleged PMEGP Loan Fraud Case In Kashmir
The Enforcement Directorate’s Srinagar Zonal Office has provisionally attached 11 immovable properties consisting of land and buildings located in Srinagar and Bandipora districts of Jammu and Kashmir.
The properties are valued at approximately ₹10.63 crore. The action was taken under the Prevention of Money Laundering Act, 2002, in connection with an alleged fraud involving the misuse of loans under the Prime Minister’s Employment Generation Programme.
According to the ED press release dated 9 November 2026, the agency has identified approximately ₹11.37 crore as suspected proceeds of crime. These funds were transferred through multiple bank accounts. Part of the money was allegedly used for the construction or renovation of properties and for personal enrichment. The investigation remains ongoing.
The ED has also reported that 270 term-loan accounts and 270 corresponding working-capital accounts linked to the PMEGP scheme at two branches of Jammu and Kashmir Bank had turned into non-performing assets. The outstanding NPA amount across these accounts is estimated at approximately ₹32 crore. The two branches are the Sumbal Branch and the Gamud Gadkhud Branch.
Allegations of fraudulent loan procurement
The central allegation is that loans under the government employment-generation scheme were obtained through fraudulent means rather than for genuine business and self-employment activities. The ED states that a network involving private suppliers-cum-brokers, borrowers and officials of J&K Bank fraudulently obtained the loans by using dummy borrowers, fabricated invoices and firms that allegedly did not exist.
Private individuals acting as suppliers-cum-brokers allegedly approached or induced prospective PMEGP borrowers to obtain loans. The borrowers’ KYC documents and other personal documents were then allegedly used to facilitate the loan applications. Invoices were generated in the names of non-existent firms and companies. These firms were allegedly registered in the names of the suppliers-cum-brokers or their family members.
The loans were allegedly sanctioned through a criminal conspiracy involving certain bank officials and private persons. The alleged arrangement included the identification and induction of PMEGP borrowers, the use of their documents, the submission of fabricated invoices, the use of non-existent supplier firms, alleged collusion with bank officials, the diversion of loan funds through multiple bank accounts, and the subsequent use of part of the funds for construction, renovation and personal enrichment.
The ED says the investigation has so far established the generation and diversion of proceeds of crime amounting to approximately ₹11.37 crore. These remain allegations and investigative findings reported by the agency. The press release does not establish that every borrower, bank employee or property holder has been convicted of an offence.
How the investigation began
The ED states that its investigation was initiated on the basis of two FIRs registered by the Anti-Corruption Bureau of the CBI in Srinagar. These FIRs concerned the alleged misappropriation of PMEGP loan amounts through criminal conspiracy involving PMEGP borrowers, bank officials of the Sumbal and Gamud Gadkhud branches of J&K Bank, and other unidentified persons. The alleged offences involved cheating the bank, misappropriating bank funds, causing wrongful financial loss to the bank and obtaining corresponding wrongful gains.
The ED subsequently initiated proceedings under the Prevention of Money Laundering Act to investigate the suspected proceeds of crime generated through the alleged underlying offences. The press release specifically notes that the CBI’s ACB registered another FIR in the matter in June 2026. The ED describes this as being registered in the same matter.
Role attributed to Hilal Ahmad Wani and others
The name specifically mentioned in the ED press release is Hilal Ahmad Wani. According to the agency, Hilal Ahmad Wani and others played a major role in fraudulently availing PMEGP loans. Borrowers were allegedly induced to obtain loans using their KYC documents and other records, while fake invoices issued by non-existent firms were used to facilitate loan sanctions. These firms were registered in the names of suppliers-cum-brokers and/or their family members. The loans were allegedly sanctioned in criminal conspiracy with officials of J&K Bank. The allegations place Wani among the principal individuals identified by the ED in the suspected loan-fraud arrangement.
Findings from the survey of bank branches
During its investigation, the ED conducted surveys at the Sumbal and Gamud Gadkhud branches under Section 16 of the PMLA. The survey revealed 270 term-loan accounts connected with PMEGP and 270 working-capital accounts connected with PMEGP. All these identified accounts had turned into non-performing assets. The NPA amount was approximately ₹32 crore.
A term loan is generally intended to finance fixed capital expenditure such as machinery and equipment. A working-capital loan is intended to finance recurring business requirements including raw materials, inventory and operating expenses.
Proceeds of crime and alleged diversion of funds
The ED states that suspected proceeds derived from the scheduled offences were diverted through multiple transactions. Part of this money was subsequently used for the construction and renovation of properties, while another portion was used for personal enrichment. The agency has traced proceeds of crime amounting to approximately ₹11.37 crore.
Some of the alleged proceeds of crime were used to construct or renovate assets held in the names of family members. The investigation has identified 11 properties held or controlled by suppliers-cum-brokers, borrowers and a bank officer. These assets were provisionally attached to safeguard the value of the suspected proceeds of crime.
The attached properties
The 11 immovable properties comprise land and buildings in Srinagar and Bandipora districts. According to the press release, the assets were held or controlled by suppliers-cum-brokers, borrowers and a bank officer. Some were held in the names of family members. The total valuation is approximately ₹10.63 crore.
Current status
The Enforcement Directorate has stated that further investigation is underway. The 11 properties remain under provisional attachment. The allegations of fraudulent procurement of PMEGP loans through dummy borrowers, fabricated invoices of non-existent firms, collusion involving bank officials, diversion of funds through multiple accounts, and use of part of the proceeds for property construction, renovation and personal enrichment form the basis of the ongoing money-laundering probe.
