Over five million suspicious deposits recorded since cash threshold rate lowered, says Bank Negara governor

Syed Jaymal Zahiid
Bank Negara Malaysia governor Datuk Nor Shamsiah Mohd Yunus delivers a speech during the 11th International Conference on Financial Crimes and Terrorism Financing at the Shangri-La Hotel, Kuala Lumpur November 5, 2019. — Picture by Hari Anggara

KUALA LUMPUR, Nov 5 — Over five million suspicious cash deposits were reported up to September after Bank Negara Malaysia (BNM) lowered the daily cash threshold to RM25,000 starting this year, Datuk Nor Shamsiah Md Yunus said today.

The cash transactions were valued at RM483 billion, the BNM governor said, saying it was still too early to draw conclusions if these deposits were in any way criminal.

Still, the volume of the cash threshold reports triggered by the transactions has nearly doubled since the new threshold was put in place, Nor Shamsiah told the 2019 International Conference on Financial Crime and Terrorism Financing here.

“It is still too early to draw any concrete conclusions, but what we have observed across the industry is the total value of cash transactions reported has increased marginally,” she said.

“The number of Cash Threshold Rate (CTR) reports received has nearly doubled.”

The significant increase in CTR received since January provides BNM with alarming but important data points that Nor Shamsiah said could enable more rigorous monitoring.

She said these “peculiarities in cash transactions” and identification of risk on newly identified entities had not been captured prior to the lowered threshold, giving the regulator insights that could help beef up its fight against financial crime.

“These additional insights also lead to a better quality of disclosures to relevant law enforcement agencies especially in relation to fraud, tax evasion, and corruption crimes,” she said.

And now regulators and law enforcement agencies are mulling the introduction of a Cash Transaction Limit (CTL) to complement the existing measures, the BNM governor added.

This system, though new to Malaysia, have long been used in countries such as France, Italy, and India.

Nor Shamsiah said a CTL could further mitigate the abuse of cash by addressing the ease of conducting high-value cash transactions.

“Even with the rise of electronic payments, we cannot wash over the fact that criminals still prefer cash because it is widely accepted, anonymous in nature and untraceable,” she said.

BNM is now gathering feedback on the system. The National Coordination Committee to Counter Money Laundering (NCC) will be consulting the public on this proposal later this month, the BNM governor said.

“The NCC wants to make an informed decision,” she said.

“As such, we hope that all of you could get the word out and encourage the public to provide feedback on the proposed measure.”

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