Banks to report cash transactions above RM25,000

KUALA LUMPUR: Bank Negara Malaysia (BNM) will be lowering the daily cash threshold report (CTR) to RM25,000 from the current RM50,000, effective Jan 1, 2019.

BNM Governor Datuk Nor Shamsiah Mohd Yunus said the move would bring Malaysia’s CTR on par with other countries, as the current threshold was too high and disconnected from the size of the country’s economy, especially in relations to purchasing power.

“Therefore, it is timely for us to look at ways to strengthen the controls to mitigate financial crime, namely the CTR requirement,” she said in her keynote address at the 10th International Conference on Financial Crime and Terrorism Financing (IFCTF) 2018 here, yesterday.

According to the BNM website, CTR refers to cash transactions exceeding RM50,000 (or any other amount advised) involving physical currencies (domestic or foreign currency) and bearer negotiable instruments such as travellers’ cheques, excluding bank drafts, cheques, electronic transfers or fixed deposit rollovers or renewals.

It also includes transactions involving cash withdrawal from accounts or exchange of bearer negotiable instruments for cash. Currently, only banking institutions and licensed casinos are obligated to provide CTRs.

Nor Shamsiah said with the reduced CTR, the central bank did not anticipate any impact in terms of economic activity, but an increase in effectiveness in taming the black economy that was still heavily reliant on cash transactions.

She noted that the lowered CTR could also strengthen the controls to mitigate financial crime, as the persistency of cash transactions among the public and small and medium-sized businesses remained high, even with the emergence of the technologies.

“This exposes the economy to risks, as cash is still being used by criminals to launder illegal proceeds,” she said, adding that similarly, cash transactions were also the preferred mode to finance terrorist activities.

Thus, the threshold needed to be updated, she said.

Nor Shamsiah said the currency in circulation in Malaysia has increased by around 150 per cent over the past decade.

“However, if we scale it to the country’s Gross Domestic Product, it has been relatively stable, ranging between 6.1 to 6.9 per cent over the past five years,” she added. Bernama