A recovery notice was issued to Maulana Tauqeer Raza for defaulting on a ₹5,055 loan taken before 1997, which has now risen to ₹28,346.
Officials said Raza had sold his Budaun properties and moved, prompting steps to seize any remaining assets for repayment.
Raza is currently in Fatehgarh Jail for his alleged role in the September 26 Bareilly violence, in which 88 people have been arrested so far.