T’puram: State govt issued a fresh warning to banks and financial institutions, directing them to comply promptly with court-ordered attachment of funds in cases registered under Banning of Unregulated Deposit Schemes (BUDS) Act, 2019. It stressed that delays in transferring attached money could undermine efforts to return funds to victims of financial fraud.In home department’s circular, govt said it noticed instances where banks were reluctant or slow in implementing orders passed by designated courts under BUDS Act. The delay affected the process of refunding money to thousands of investors who were cheated through illegal deposit schemes, it said.The circular was circulated to nationalised and private banks, co-operative banks, and other financial institutions across the state, along with district collectors, state police chief and other enforcement agencies, with instructions to ensure strict compliance.The circular made it clear that orders issued under the Act must be treated as binding legal directions. “Once orders are issued by the competent authority or the designated court, the transfer of attached amount shall be treated as a statutory obligation of the bank concerned,” said govt.Govt sources said BUDS Act was enacted to curb fraudulent investment schemes that lure people with promises of unusually high returns and later collapse, leaving depositors without recourse. The law enables authorities to attach properties and bank deposits of accused so that money can be distributed among victims.The circular stressed that attachment orders issued under Section 13 of the Act carry priority over other recoveries, including tax dues or govt claims. It noted that primary objective of the law is to ensure that defrauded investors receive compensation as quickly as possible.Also, govt warned that officials who fail to implement such directions could face consequences. The directive comes amid several large deposit fraud investigations in Kerala where thousands of investors were left waiting for recovery of their savings. In Popular Finance case in Pathanamthitta, estimated to involve nearly Rs 2,000 crore and around 30,000 investors, high court recently criticised delays in proceedings under the BUDS framework.Similarly, authorities invoked the Act in other major cases, including Farmfed deposit scam, where investors were allegedly lured with promises of 12.5% interest, and High Rich Online Shoppe multi-level marketing case, where more than Rs 200 crore in bank accounts was provisionally attached during the investigation.
