Bangkok: The Bank of Thailand (BOT) is taking decisive steps to curb illegal funds by requiring financial institutions and money exchange shops to submit transaction data and adhere to strengthened Know Your Customer and Customer Due Diligence procedures.
According to Thai News Agency, BOT Governor Vitai Ratanakorn has unveiled measures to control illegal capital flows and the movement of the baht. Under the current law, the BOT does not maintain detailed records of baht flows. However, if transactions such as transfers exceeding 500,000 baht or cash deposits over 2 million baht are flagged, the information is forwarded to the Anti-Money Laundering Office (AMLO).
The BOT plans to combat gray capital by increasing visibility of suspicious money trails through existing laws and regulations, including the Financial Institutions Act and the Payment Systems Act. This move mandates financial institutions to provide transaction data as specified by the BOT, aiming to protect consumers and prevent the financial sector from being exploited for fraud. This includes rapid large-scale fund transfers and accounts appearing on online gambling platforms, allowing further action or data submission to support AMLO’s operations.
Additionally, the BOT will enhance supervision and KYC practices for commercial banks and specialized financial institutions, issuing regulations to intensify customer identification, verification, and due diligence processes. This aims to quickly identify and address risks while enhancing consumer protection.
For e-Wallet and Money Transfer Agent service providers, supervision will be elevated to the level of commercial banks. Measures such as customer profiling and setting transfer limits via digital channels will be implemented based on individual transaction behaviors. The BOT will also review and enforce suspicious transaction detection systems if service providers engage in illegal activities.
Money Changers will see improved monitoring for unusual transactions and additional standards set for customer service. Governor Vitai highlighted that current gold transactions significantly impact currency exchange rates, especially gold trading in baht, leading to increased volatility. Gold shops must manage their risk in both gold transactions with foreign countries and foreign exchange trading.
Currently, the BOT only has data when gold shops conduct foreign exchange transactions with domestic commercial banks. There’s a lack of information on gold shops trading in foreign markets, conducting FX transactions through affiliated companies abroad, or engaging in cryptocurrency transactions.
To address this, the BOT is in the process of adjusting the Ministry of Finance’s announcement to obtain more comprehensive data, aiming to monitor currency exchange rate impacts and develop relevant policies.