KUALA LUMPUR: Malaysia is planning to impose a cash transaction limit of RM25,000 starting next year, in a bid to strengthen the country's financial integrity, an official from the nation's central bank said on Thursday (Nov 7).
“This is to address the abuse of physical cash used for illicit activities,” Bank Negara Malaysia deputy governor and chairman of the National Coordination Committee to Counter Money Laundering (NCC) Abdul Rasheed Ghaffour said at a media briefing.
The measures will apply to all transactions involving physical cash payments including payments of goods and services, donations and transfers between parties, which are applicable to individuals, businesses and other entities.
Industries that deal with large cash transactions that may be impacted by the new limits are high-value dealers, medical tourism, hotels, and wholesale, he added.
“However, there are two important exemptions to note. Firstly, any cash transactions to or with financial institutions are exempted. As regulated entities, these institutions are already subjected to stringent anti-money laundering or counter-terrorism financing requirements.
“Secondly, cash transactions under circumstances such as for humanitarian aid also (will be) exempted for the approval of the Ministry of Finance on the recommendation of Bank Negara Malaysia,” said Abdul Rasheed. He added that the changes would not affect households.
“Our engagements with individuals suggested that a single transaction over RM25,000 by cash is really (unprecedented). This can also be seen with the average total expenditure of households across various income brackets.
“The average total money spending of the T20 household is around RM8,000 a month, which is really below the limit. There is no reason why these people will be affected by this proposal,” said Abdul Rasheed.
The central bank has also conducted bilateral engagements with various business associations.