ED Seizes ₹10.63 Crore Assets in Massive J&K Bank Loan Scam
Enforcement Directorate attaches 11 properties in Srinagar and Bandipora linked to a ₹32 crore PMEGP loan scam involving J&K Bank.
The Enforcement Directorate (ED) has tightened the noose on a sophisticated financial scam by provisionally attaching 11 immovable properties worth ₹10.63 crore. This action comes in connection with a staggering ₹32 crore loan fraud involving the Prime Minister's Employment Generation Programme (PMEGP) linked to J&K Bank.
The Scale of the Deception
The federal agency's crackdown targets land and buildings located across the Srinagar and Bandipora districts. The proceedings were carried out under the Prevention of Money Laundering Act (PMLA), 2002, as investigators uncovered a deep-rooted conspiracy to siphon off public funds intended for employment generation.
The probe has highlighted a shocking number of fraudulent accounts. Investigators found that the scam centered around 540 accounts—comprising 270 term loan accounts and 270 working capital accounts—at the Sumbal and Gamud Gadkhud branches of J&K Bank. All of these accounts have since been classified as non-performing assets (NPAs), meaning the loans were never intended to be repaid.
How the Fraud Was Executed
According to the ED, the operation was a calculated effort to cheat the banking system. The investigation revealed a blueprint of deception that included:
- Dummy Borrowers: Loans were applied for and sanctioned using fake identities or "dummy" borrowers who existed only on paper.
- Ghost Firms: To justify the disbursement of funds, the conspirators used fake invoices from firms that did not actually exist.
- Money Laundering: Once the loan money hit the accounts, it was routed through multiple channels to hide its origin and make the illicit funds appear legitimate.
A Criminal Nexus Uncovered
The investigation suggests that this was not the work of a few isolated individuals but a coordinated criminal nexus. Evidence points toward a collusive relationship between bank officials, private individuals, and middlemen who worked together to exploit the PMEGP scheme.
The ED discovered that approximately ₹11.37 crore of the "proceeds of crime" were directly funneled into the acquisition and construction of the properties that have now been attached.
Ongoing Legal Battle
The ED's action follows initial investigations and First Information Reports (FIRs) filed by the Central Bureau of Investigation (CBI) and the Anti-Corruption Bureau (ACB) in Srinagar. The systemic nature of the fraud has led to further scrutiny, with the CBI registering a fresh FIR in June 2026 to delve deeper into how these banking resources were systematically exploited.