The Bank of Thailand and the financial sector have joined forces to step up measures against illicit financial activities.
Speaking at a framework signing on Thursday, central bank governor Vitai Ratanakorn said the joint initiative would help ensure the financial sector is not exploited to facilitate illegal activities of any kind.
Financial service providers supervised by the regulator that are participating in the framework comprise 11 entities, including the Thai Bankers’ Association, the Association of International Banks, the Government Financial Institutions Association, the Thai E-Payment Trade Association, the Thai Association of Foreign Exchange and Financial Services, and six associations representing non-bank lenders.
Mr Vitai said the goal is to promote a financial system that is stable, secure and trusted, while protecting the public from harm arising from the misuse of financial services. Under the framework, participating organisations are expected to establish clear strategic directions, policies and governance arrangements to prevent the misuse of the financial system, and to embed this responsibility as an integral part of corporate governance.
Financial institutions are also expected to translate these principles into concrete and effective preventive measures, supported by minimum standards appropriate to the nature of each business and regularly updated to reflect the evolving environment.
Participating organisations will also leverage their respective strengths in data analysis, technology and expertise to enhance surveillance, detection and response capabilities.
Their cooperation and exchange of information, knowledge, fraud typologies, warning indicators and good practices with relevant stakeholders across sectors will strengthen their collective ability to address sophisticated fraudulent transactions, which often exploit legal or institutional gaps between agencies, Mr Vitai said.
In implementing these measures, appropriate consideration will also be given to balancing their impact on legitimate customers, access to financial services, fair competition and innovation.
In addition, Mr Vitai said the central bank would further strengthen system-wide supervisory standards, including customer and counterparty due diligence, as well as the use of data, technology and expertise to enhance its ability to monitor and detect high-risk transactions.
“Although the central bank does not have the authority to arrest offenders, under this cooperation we can block undesirable transactions. Such transactions will become more difficult to carry out, and we believe this will help reduce the volume of transactions involving illicit funds, grey money and corruption-related activities, similar to other measures already introduced by the Bank of Thailand,” he said.
Regarding the existing requirement for clarification on cash withdrawals exceeding 5 million baht per transaction, Mr Vitai said the volume of such transactions had declined to around 40 billion baht, from 100 billion baht. Gold transactions in baht via digital platforms have fallen by 40% following the introduction of the measure.