The Bank of Thailand reveals that the 5 million baht withdrawal limit has been effective, resulting in a 30% drop in withdrawals. It will continue to enforce the requirement that deposits and exchanges at small banks must disclose the source of funds.

The Governor of the Bank of Thailand revealed that withdrawals exceeding 5 million baht must now include a declaration of the purpose, causing transaction volumes to plummet by nearly 30%. The government will continue to tighten regulations on "deposits and exchanges of small banknotes," requiring disclosure of the source of funds.

Mr. Vitai Ratanakorn, Governor of the Bank of Thailand (BOT) Speaking at the GovernorConnect event on June 2, 69, progress was made in implementing measures to monitor suspicious transactions, particularly the regulation of high-value cash withdrawals, which is beginning to have a significant impact.

Since the implementation of the measure requiring those withdrawing cash exceeding 5 million baht to clearly state the purpose of the withdrawal, which began in early April, it has been observed that in April: the number of cash withdrawals decreased by 28% and the withdrawal value decreased by 25% compared to the average in the first quarter.

In May, the downward trend continued, with transaction volume decreasing by approximately 25-30%.

"Even after the election period, the continued downward trend reflects the success in pushing transactions back into a verifiable system. It underscores that forcing suspicious transactions into the transfer system helps the country have a more transparent financial system."

Mr. Witai added that The Bank of Thailand is preparing to intensify its regulatory oversight in the next 2-3 months, extending the scope to deposit and banknote exchange transactions with a transaction value of 5 million baht or more. This includes cash deposits; those depositing large sums of cash exceeding 5 million baht must clearly explain the source of the funds. Similarly, exchanging smaller denominations, such as exchanging 1,000-baht banknotes for 500- or 100-baht banknotes of higher value, requires specifying the purpose and necessity of using those banknotes.

"This measure aims to make it difficult for informal businesses or shady capital to circulate cash. Financial institutions are required to investigate unusual transaction patterns, such as withdrawals from multiple branches under the same name, in order to prevent unwanted transactions."

Furthermore, in the long term, the Bank of Thailand aims to change consumer behavior to increasingly adopt digital financial systems. This involves strengthening Know Your Customer (KYC) and Customer Due Diligence/Expanded Data (CDD/EDD) processes to be more stringent and standardized across the industry in order to reduce money laundering risks and increase transparency.

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