Srinagar | A major banking scam has come to light in Jammu and Kashmir after the Central Bureau of Investigation registered a case against 19 individuals over alleged corruption and large-scale fraud linked to the Prime Minister’s Employment Generation Programme (PMEGP). The case pertains to irregularities detected at the Sumbal branch of Jammu and Kashmir Bank, where officials are suspected of colluding with private individuals to divert loan funds.
According to the First Information Report (FIR), a criminal conspiracy was allegedly executed from 2022 onwards, involving the preparation of fake loan applications and manipulation of approval processes. Bank officials are suspected of facilitating the sanctioning of loans in the names of beneficiaries, while the funds were later diverted to unrelated accounts instead of being used for self-employment activities as intended under the scheme.
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Investigators have found that forged invoices, fake bills, and manipulated documentation were repeatedly used to justify loan disbursements. Once sanctioned, the funds were allegedly routed through multiple accounts and ultimately siphoned off by the accused and their associates, causing significant financial loss to the bank and the public exchequer.
The FIR names 19 individuals, including several private persons accused of working in coordination with bank officials to fabricate documents and influence the loan approval process. Those named include Hilal Ahmad Wani, Ali Mohammad Wani, Shabir Ahmad Wani, Khalida Bano, Fameeda Bano, Ghulam Mustafa Wani, Kamran Bhat, Tanveer Ahmad Wani, Farooq Ahmad Sheikh, Syed Zaffer Shah, Muzaffar Ahmad Beigh, Syed Abul Qasim, Zaffar Ahmad Hakak, Bilal Ahmad Dar, Mudasir Ahmad Ahangar, Naveed Ahmad Bhat, Bilal Ahmad Reshi, and Ghulam Nabi Dar, among others.
The probe also indicates the possible involvement of unidentified government employees and officials linked to various development agencies, suggesting that the scam may extend beyond a localized network. Authorities believe the financial trail could point to a wider organized structure involving intermediaries and multiple layers of transactions designed to conceal the movement of funds.
Preliminary findings suggest serious procedural violations during loan sanctioning, with eligibility checks allegedly being bypassed in several cases. This allowed ineligible applicants to benefit from government-backed financial support, while genuine beneficiaries were reportedly deprived of assistance under the scheme.
Experts note that such scams not only undermine the credibility of banking institutions but also weaken the core objectives of welfare-oriented government programmes like PMEGP, which aim to promote self-employment and rural entrepreneurship.
Investigators are currently examining bank account records, digital transaction trails, and supporting documentation to trace the flow of diverted funds. Efforts are also underway to identify intermediaries involved in creating fake invoices and facilitating fraudulent loan approvals.
Officials have stated that further names may emerge as the investigation progresses, given the scale and complexity of the alleged network. Authorities are also analysing systemic loopholes in banking procedures that may have been exploited to execute the fraud.
The agency has assured strict action against all individuals found guilty and confirmed that recovery proceedings for misappropriated public funds will be initiated. The case highlights once again the urgent need for stronger oversight, improved verification mechanisms, and tighter controls within financial institutions handling government-backed schemes.
The investigation remains ongoing, with the CBI expected to expand its probe into additional branches and related financial transactions in the coming weeks.
