Srinagar, Dec 1 (IANS): The Enforcement Directorate on Friday arrested the former Chairman of a co-operative bank in Jammu and Kashmir for alleged money laundering fraud of Rs 250 crore.

ED sources said that the former Chairman of J&K Co-operative Bank, Mohammad Shafi Dar was arrested along with Hilal Ahmad Mir, Chairman of the private Co-operative House building society in connection with a money laundering fraud of Rs 250 crores being probed by the agency.

"The Co-operative House Building society turned out to be fictitious," a source said.

Earlier, sleuths of ED had carried out raids at different places including the house of Dar from where incriminating evidence was said to be recovered. The investigation was carried out by the ED under the Prevention of Money Laundering Act, sources added.

The J&K anti-corruption bureau (ACB) had filed a charge sheet in August 2020 against Dar and Mir under the IPC and the Prevention of Corruption act. ACB investigation had found that the co-operative Bank had sanctioned a loan of Rs 223 crore without fulfilling any formalities.