Although we are moving towards a cashless society, there are still many of us who use cash in our daily transactions. Bank Negara Malaysia Governor Datuk Nor Shamsiah Yunus has just announced on Tuesday (Oct 30) that starting from January 1, 2019, banks will need to report any cash transactions exceeding RM25,000 in their daily cash threshold report.
She made this announcement during her keynote speech at the 10th International Conference on Financial Crime and Terrorism Financing, The Star reported. Before this, banks would only have to flag transactions that were over RM50,000 but it will now be reduced by half starting from 2019.
She explained that small and medium-sized businesses, as well as the masses, still preferred to use cash although going cashless is very convenient now.
“This opens up the economy to risks as cash is still being used by criminals to launder illegal proceeds, as we have seen from some high-profile cases over the past year or so. Similarly, this is the preferred mode to finance terrorist activities, which will involve transacting in cash,” she explained.
Currently, customers only need to disclose their source of funds if the amount is more than RM50,000 for transactions performed over the counter, using physical currencies, and using other financial means such as travellers’ cheques.
She added that reducing the limit would help to combat financial crimes as RM10 trillion had been lost globally and this step can help lower the risk. Nor Shamsiah said that actually, Malaysia’s limit had always been much higher than other countries and by decreasing it, this would make our status more on par with others.
“When we compare Malaysia with other countries, our current threshold is too high and disconnected from the size of our economy, especially relative to our purchasing power,” she said. However, it was reported that the limit set would exclude bank drafts, cheques, electronic transfers or fixed deposit rollovers or renewals.
Remember to prove your source of funds if you want to perform cash transactions over RM25,000 in 2019!