This article first appeared in The Edge Financial Daily on November 6, 2019

KUALA LUMPUR: Bank Negara Malaysia (BNM) had received over five million cash threshold reports (CTRs) on transactions involving about RM483 billion as of September this year, according to the central bank’s governor Datuk Nor Shamsiah Mohd Yunus.

Nor Shamsiah pointed out that while it is still too early to draw any concrete conclusion, BNM observed that across the industry, the total value of cash transactions reported had increased marginally, but the number of CTRs received had nearly doubled.

The central bank reduced the daily CTR threshold from RM50,000 to RM25,000 earlier this year.

“The significant increase in CTRs received since January provides us important data points that enable more rigorous monitoring of peculiarities in cash transactions and identification of money laundering/terrorist financing risks from newly identified entities that have not been captured previously.

“These additional insights also lead to better quality of disclosures to relevant law enforcement agencies, especially in relation to fraud, tax evasion and corruption crimes,” Nor Shamsiah said.

A CTR refers to cash transactions exceeding RM25,000 involving physical currencies (domestic or foreign) and bearer negotiable instruments, such as travellers’ cheques, but excludes bank drafts, cheques, electronic transfers and fixed deposit rollovers and renewals. These include transactions involving withdrawals of cash from accounts or exchange of bearer negotiable instruments for cash.

CTRs are applicable to single or multiple cash transactions within the same amount specified in a day. Where there are deposit and withdrawal transactions, the amount must be aggregated. For example, a deposit of RM40,000 and a withdrawal RM20,000 must be aggregated into an amount of RM60,000 and hence must be reported if it exceeds the amount specified.

The governor was delivering her key note speech at the closing of the first day of the 11th International Conference On Financial Crime And Terrorism Financing 2019 here yesterday.

Nor Shamsiah also noted that BNM is considering imposing a cash transaction limit. The regulatory and law enforcement community is in the midst of exploring a cash transaction limit to complement existing financial integrity measures. While it is new to Malaysia, Nor Shamsiah said many other countries such as France, Italy and India had already implemented it.

“This measure will further mitigate 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. For this purpose, the National Coordination Committee to Counter Money Laundering will consult the public on this proposal later this month,” she said.