ED ATTACHES ASSETS IN NAGPUR BANK FRAUD PROBE UNDER PMLA

By Sarhind Times Investigations Desk | Nagpur / New Delhi | October 2, 2025

NAGPUR: The Enforcement Directorate (ED) has tightened its money-laundering probe into a Nagpur-centric bank fraud, moving against properties and proceeds believed to have been siphoned through shell layers and bogus billing. In the latest round of action, the agency said it has identified over ₹100 crore of immovable assets linked to a ₹152.90-crore loan fraud that exploited farmers’ identities to raise crop-linked credit, even as movable assets—bank balances and insurance policies—were frozen during coordinated searches across Maharashtra and Andhra Pradesh. While the present operation centred on raids and freezing, officials indicated the case is proceeding on the PMLA track toward provisional attachment and adjudication, a standard next step once tracing is complete.

At the heart of the probe are Ramana Rao Bolla and Nutan Rakesh Singh, whom ED accuses of collecting Aadhaar and KYC papers from scores of farmers under the false pretext of facilitating government compensation for crop losses. Investigators say 158 fraudulent accounts were opened and loans of ₹49–50 lakh each were sanctioned, before the funds were siphoned. One branch alone booked an estimated ₹113 crore loss; a parallel syndicate attributed to Singh allegedly added ₹39 crore more, according to the agency’s press note and corroborating local reportage.

Key development: ED’s search memo records freezing of movable assets and the identification of immovable property worth over ₹100 crore; after such raids, the agency typically moves for provisional attachment under Section 5 of PMLA and then seeks confirmation from the Adjudicating Authority under Section 8.

What exactly ED did this week

According to the ED’s Nagpur Sub-Zonal Office, officers searched eight locations—including premises in Nagpur, Bhandara (Maharashtra) and Guntur (Andhra Pradesh)—seizing incriminating documents, property papers, digital devices and ₹10 lakh in cash. The search teams also froze bank balances and insurance policies they believe are linked to the alleged diversion. In parallel, forensic audits and fund-flow analyses are being layered over the documentary haul to firm up the “proceeds of crime” trail before the matter is placed before the Adjudicating Authority.

The contours of the fraud—identity harvesting, circular transactions, and proxy accounts—mirror several bank cases in the region in recent years, although the scale and the use of agricultural credit lines make this probe particularly sensitive. Investigators say many farmers were misled into parting with KYC papers, with subsequent loans being guaranteed centrally and then drained through controlled entities, sometimes to service older liabilities.

What “attachment” means—and why it matters now

A frequent source of public confusion is the difference between search/seizure, freezing, and attachment. Under the Prevention of Money-laundering Act (PMLA):

The ED can search and seize records or property where it has reason to believe there are proceeds of crime.
It can freeze bank accounts or securities to prevent dissipation while facts are being established.
It can also provisionally attach property—immovable or movable—under Section 5(1) if it believes the asset is proceeds of crime that might be concealed or transferred. That provisional attachment typically lasts up to 180 days, pending confirmation by the Adjudicating Authority under Section 8; once confirmed, the attachment continues (up to 365 days or during pendency of proceedings), with potential confiscation upon final orders of the Special Court.

In practical terms, freezing halts movement; attachment ring-fences the asset in law. The ED’s current Nagpur action has already frozen movable assets and mapped over ₹100 crore of property. Based on precedent, investigators are now expected to file/expand provisional attachment orders and submit the complaint to the Adjudicating Authority within 30 days of the attachment order, a statutory clock that starts once a PAO is issued.

To underscore the agency’s pattern in the region, the Nagpur sub-zone earlier this year provisionally attached properties worth about ₹1.69 crore in an unrelated bank-fraud matter (Rajmal Lakhichand Jewellers) spread across Jalgaon and Nashik—an example of the attach-and-adjudicate pipeline now familiar to local courts and counsels.

The case against the accused: what ED says the trail shows

Modus operandi, as alleged:

Identity capture: The accused teams allegedly canvassed farm districts, promising help with crop-failure compensation, and collected Aadhaar and KYC.
Account seeding: 158 accounts were opened under a crop/produce loan template, with loans of ₹49–50 lakh each sanctioned; guarantees were managed centrally.
Siphoning & layering: Funds moved through related entities, with portions allegedly used to purchase real estate and service earlier obligations, producing layered fund flows typical of laundering cycles.
Bank loss ledger: The notional loss ledger for one branch alone reportedly stands at ₹113 crore, with a parallel tranche tied to a second syndicate adding ₹39 crore (interest inclusive).

The ED press note stresses that the money trail has been mapped to properties in the names of the accused, relatives, and beneficially controlled entities. This mapping is crucial because PMLA attachment must pin specific assets as “proceeds of crime” or equivalent value—and cannot be a broad, untethered net. (Higher fora have repeatedly flagged that attachment must be asset-specific and proportionate to the alleged proceeds.)

What happens next: the adjudication arc

Once a Provisional Attachment Order (PAO) is issued on the assets traced, ED must file a complaint before the PMLA Adjudicating Authority within 30 days. The Authority then issues notices, hears the parties, and decides whether to confirm the attachment under Section 8(3). A confirmed attachment can run up to 365 days (or for the pendency of proceedings), after which confiscation may be ordered by the Special Court if the property is held to be proceeds of crime. Appeals lie to the Appellate Tribunal and then to the High Court.

Defence lawyers in such matters typically contest:

the valuation (and hence the extent) of attachment;
the linkage of a listed asset to the alleged proceeds;
procedural timelines (e.g., the 180-day clock and complaint-filing windows); and
the equivalent-value doctrine (when the exact asset is unavailable). Recent scholarship and rulings have refined these questions—particularly around equivalent-value substitution and the co-existence of seizure and attachment—but the core remains: ED must show its math from crime to property.

Why this case is sensitive: agriculture, identity, and systemic risk

Unlike many urban corporate frauds, the victims here include farmers whose identities were allegedly weaponised. That makes the case politically and socially charged. For banks, the episode highlights KYC controls, branch-level supervision, and audit patterns in agri-linked lending—a segment that often blends public-policy goals with commercial underwriting.

Regulators and lenders will likely review:

Branch oversight over mass loan sanctioning linked to an external guarantor;
Early-warning flags on simultaneous similar-ticket loans;
Forensic triggers for repeat patterns across geographies; and
Identity-proof workflows where locals act as intermediaries for multiple applicants.

What the numbers tell us—and what they don’t

₹152.90 crore is the headline fraud tally the agency has put on record in the Corporation Bank (now Union Bank) matter.
₹100+ crore is the immovable property value ED now claims to have identified in connection with the case; the figure will be refined as valuation notes firm up.
“Freezing” vs “attachment”: ED’s press note and reportage from Nagpur explicitly cite freezing of movable assets and identification of immovable assets this week. Attachment is the next legal step—one that has been deployed by the same sub-zone in earlier bank-fraud matters (e.g., Rajmal Lakhichand Jewellers, Feb 2025).

For the public, the semantic distinction is less important than the practical outcome: assets are ring-fenced so they cannot be sold or spirited away, pending judicial scrutiny of whether they are in fact tainted.

Legal explainer: the PMLA ladder, step by step

Registration of predicate offence: A scheduled offence (FIR/charge-sheet) under IPC/PC Act/Banking statutes triggers PMLA jurisdiction.
ECIR & investigation: ED opens an Enforcement Case Information Report; records statements, pulls banking and company data, and maps flows.
Search & seizure/freezing: Where warranted, ED searches premises, seizes documents/devices, and freezes accounts to halt movement of suspected proceeds.
Provisional attachment (Sec. 5): On “reason to believe” a property is proceeds of crime that may be concealed/transferred, ED attaches for up to 180 days.
Complaint to Adjudicating Authority: Within 30 days of a PAO, ED must file a complaint; the Authority conducts hearings.
Confirmation (Sec. 8): If the Authority agrees, the attachment is confirmed (typically 365 days or during pendency).
Trial & confiscation (Sec. 8(5), Sec. 9): Upon conclusion before the Special Court, tainted properties may be confiscated to the Centre; innocent interests can be adjudicated.

Defence playbook: what the other side will argue

Valuation & proportionality: Expect defence to pick apart valuations and insist that attachment cannot exceed the “proceeds of crime.”

Causation: Lawyers will interrogate how each asset is linked—directly or via equivalent value—to the alleged siphoning.

Timelines & due process: The 180-day and 365-day clocks, as well as notice and hearing standards, often become battlegrounds in Tribunal and High Court.

Third-party rights: If an attached property is jointly held or has since been transferred to an innocent buyer, the scope of protection under PMLA is frequently litigated.

Why this story extends beyond one case

The ED’s Nagpur-Guntur arc in this probe illustrates how alleged laundering schemes straddle states and jurisdictions, often using commodity or agri-finance narratives to make documentation look routine. For lenders, the lesson is not only about KYC but also pattern recognition: when dozens of similar tickets cluster with one guarantor, escalation should be automatic.

For policymakers, every such case feeds into debates about risk-based supervision, credit monitoring, and technology-driven anomaly detection—areas where banks are investing but where branch-level vigilance remains decisive.

The human angle: farmers, reputations, and restitution

Behind the ledger entries are farmers who may now find their credit histories scarred by loans they never truly received or used. Restitution in PMLA cases is complicated: criminal confiscation prioritises the State, while bank recovery proceeds through SARFAESI/DRT channels, and victim redress often requires separate claims. Yet, when identity-based fraud is established, banks can and do write back and pursue recovery from principal wrongdoers—a process that will be watched closely here.

Timeline—what we know so far (Nagpur case)

2017 onwards: Fraud pattern in a Corporation Bank branch flagged; identity-harvesting and loan siphoning suspected
Sept 26, 2025: ED searches eight locations across Nagpur, Bhandara, Guntur in the PMLA case; freezing of movable assets; over ₹100 crore in immovable property identified.
Oct 1–2, 2025: Public updates by ED and local press detail modus operandi, farmers’ KYC misuse, and the ₹152.90-crore headline figure; adjudication steps expected next.
Feb 2025 (context): In an unrelated Nagpur-anchored bank-fraud case, ED attached ₹1.69 crore worth of immovable properties—showing the path the current case may follow.

Bottom line

The ED’s Nagpur bank-fraud probe has moved decisively from fact-gathering to asset-protection, with freezing orders in place and over ₹100 crore in properties mapped to the alleged fraud. The legal fulcrum now shifts to provisional attachment and adjudication—a process that will test the traceability of each asset to the proceeds of crime, the proportionality of attachment, and the due-process guardrails PMLA requires. For farmers whose identities were exploited, for the lender absorbing losses, and for the region’s banking system, the stakes are both financial and moral.