Kashmir PMEGP Scam: ED Seizes Assets Worth Rs 10.63 Crore
The Enforcement Directorate has attached properties worth Rs 10.63 crore in Kashmir following a massive fraud involving the PMEGP loan scheme.
The Enforcement Directorate (ED) has cracked down on a massive financial fraud in Kashmir, attaching immovable properties valued at Rs 10.63 crore. The action comes in connection with the blatant PMEGP scheme misuse, where government funds intended for employment generation were siphoned off through a sophisticated criminal conspiracy.
The Crackdown in Srinagar and Bandipora
The ED's Srinagar zonal office executed the attachment under the Prevention of Money Laundering Act (PMLA), 2022. A total of 11 assets, comprising various lands and buildings located across the Srinagar and Bandipora districts, have been seized. These properties were found to be in the possession of a network involving suppliers-cum-brokers and a bank official from the J&K Bank who collaborated to defraud the system.
A Web of Deceit: How the Scam Worked
The investigation, which began based on two First Information Reports (FIRs) filed by the Central Bureau of Investigation (CBI) in Srinagar, revealed a shocking pattern of misappropriation. The fraud was carried out through a calculated alliance between private brokers, "dummy" borrowers, and corrupt bank officials at the Sumbal and Gamud Gadkhud branches of J&K Bank.
According to the ED, the conspiracy operated as follows:
- Dummy Borrowers: Private brokers induced individuals to apply for loans under the Prime Minister Employment Generation Programme (PMEGP).
- Fake Paperwork: The conspirators used the KYC documents of these borrowers alongside fake invoices from non-existent firms and companies.
- Insider Help: These fraudulent applications were sanctioned through a criminal conspiracy with officials at the J&K Bank branches.
Shocking Numbers: Rs 32 Crore in NPAs
The scale of the fraud became evident when the ED conducted a survey at the Sumbal and Gamud Gadkhud branches. The agency discovered that 270 term loan accounts and 270 corresponding working capital accounts—all linked to the PMEGP scheme—had turned into Non-Performing Assets (NPAs).
The total NPA amount was estimated to be approximately Rs 32 crore. The federal agency noted that the "proceeds of crime" were moved through multiple bank accounts in a series of complex transactions to hide the money trail.
Personal Enrichment and Money Laundering
The ED's probe identified Hilal Ahmad Wani and several others as key players in the fraudulent loan process. The investigation traced the generation of "Proceeds of Crime" (PoC) amounting to Rs 11.37 crore.
Rather than being used to create jobs or start businesses, these funds were diverted for personal gain. A significant portion of the money was used for the construction and renovation of assets held in the names of the accused persons' family members. The ED stated that the bulk of the PoC has been siphoned, proving the involvement of the accused in the diversion and concealment of illegal funds.
The CBI has continued its scrutiny of the matter, having registered a fresh FIR in June 2026 to further investigate the depths of this conspiracy.