Thursday 28 Mar 2024
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This article first appeared in The Edge Malaysia Weekly on November 11, 2019 - November 17, 2019

Bank Negara Malaysia’s proposal to set a cash transaction limit (CTL) of RM25,000 next year as part of its initiative to continue curbing financial crimes is a move in the right direction.
A CTL is the cap on the physical cash amount that can be paid per transaction.
Under the proposal, cash transactions above the limit cannot be paid by cash and must be paid electronically — for example, by credit card or by cheque. Any intention to circumvent this limit is an offence for the payer and payee, according to the central bank.

Bank Negara deputy governor Datuk Abdul Rasheed Ghaffour said last week that the need for a CTL arises because the untraceable and anonymous nature of cash transactions makes it an ideal vehicle to facilitate illicit activities.

The move is not to hinder legitimate cash payments for goods and services — most of which are for small-ticket items, Abdul Rasheed said. The CTL will cover all types of cash transactions, including payments for goods and services, donations and payments between individuals for personal purposes.

Transactions made through banks, money changers and prescribed institutions as well as those made with the approval of the Ministry of Finance for “exigent circumstances”, such as humanitarian and disaster relief, will be exempted.

The CTL is aimed at strengthening the country’s anti-money laundering/counterterrorism financing framework and complements existing integrity measures such as the suspicious transaction report and cash threshold report.

Certainly, the measure should help reduce corruption, curb money laundering and rein in the black economy.

It should not be seen as burdensome to the public as today’s technology already allows cashless transactions.

In any case, those who are against it still have until Dec 31 to provide their feedback to the central bank.

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