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The Enforcement Directorate has provisionally attached 11 immovable assets valued at Rs 10.63 crore across Srinagar and Bandipora districts in connection with the alleged misuse of the Prime Minister Employment Generation Programme. The action was taken by the agency’s Srinagar Zonal Office under the Prevention of Money Laundering Act, targeting land and commercial buildings linked to suppliers, middlemen, and bank officials implicated in the scheme. According to the agency, the attachment order was issued under Section 5(1) of the legislation to protect the identified proceeds of crime from further alienation.
Investigators initiated the money laundering probe following two regular cases registered by the Srinagar Anti-Corruption Bureau and the Central Bureau of Investigation in June 2026. Both agencies had alleged criminal conspiracy and misappropriation of public funds earmarked for self-employment credit. The primary allegations pointed to illicit collusion among private loan applicants, independent brokers, and staff at the Sumbal and Gamud Gadhkhud branches of Jammu and Kashmir Bank, resulting in severe financial loss to the financial institution alongside wrongful gains to private entities.
Survey Uncovers Massive Non-Performing Assets in Branch Audit
A formal survey executed under Section 16 of the anti-money laundering law at the two bank branches uncovered significant structural discrepancies in loan operations. Agency officials detected 270 individual term loan accounts and an identical count of corresponding working capital accounts tied directly to the central government’s employment generation initiative. Nearly the entirety of this segment had deteriorated into bad credit, with bad debts and non-performing assets totaling Rs 32 crore across the two implicated branch locations.
Federal investigators determined that the credit process was compromised through systematic fronting of fraudulent beneficiaries. Local individuals were induced to supply their identification papers, which were subsequently processed by bank employees who bypassed statutory appraisal mechanisms. In exchange for processing these applications, suppliers and internal personnel ensured the direct release of public capital against fake operational profiles.
Network Exploited Fictitious Commercial Enterprises and Paper Invoices
The operational scheme depended on establishing nonexistent business entities to fabricate procurement records. Inquiries established that Hilal Ahmad Wani, alongside several associates, coordinated the submission of counterfeit commercial invoices attributed to bogus enterprises registered under the names of middlemen and their family members. Because the enterprises existed only on paper, no industrial machinery or physical inventories were ever acquired.
Instead, the funds disbursed by the lending institution were transferred straight to vendor entities controlled by the ring of brokers. Official documentation submitted to the branches falsely represented normal enterprise operations, allowing the illicit credit flow to continue unnoticed across multiple accounting cycles without genuine micro-enterprises ever being established on the ground.
Laundered Capital Funneled Into Private Real Estate Developments
Financial tracing conducted across the banking system established the generation of Rs 11.37 crore in direct proceeds of crime. The agency uncovered evidence showing that the diverted capital moved through numerous intermediary bank accounts in layered transactions to mask its illicit origins. Substantial tranches of these diverted funds were siphoned off for personal financial enrichment and direct estate improvements.
Significant portions of the loan proceeds were utilized to finance new construction, acquisition, and extensive renovation of residential and commercial properties registered under the names of the accused persons and their relatives. By linking these construction expenditures and properties directly to the diverted loan capital, the agency attached the 11 identified properties across the Kashmir Valley while ongoing proceedings continue against the individuals involved.
