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, today.
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.
Meanwhile, IFCTF 2018 Organising Chairman V Maslamani told a press conference that the new daily CTR threshold was timely as the RM50,000 threshold was high compared with that of the United States, where the daily CTR only stood at US$10,000.
However, he agreed the move would entail additional cost to the banks, but said the amount would be minimal.
The two-day IFCTF 2018 which begins today is organised by the Asian Institute of Finance (AIF) in collaboration with the Compliance Officers’ Networking Group, featuring over 40 speakers and subject matter experts sharing cross-border solutions in combating financial crime and terrorism financing. – Bernama
Source: Borneo Post Online