Banks Strengthen Monitoring to Combat Grey Money
Banks in Thailand have committed to maintaining rigorous monitoring and investigations of grey money transactions, aligning with the heightened measures introduced by the Bank of Thailand. This initiative aims to ensure that financial institutions remain vigilant against suspicious activities that could be linked to illegal or unethical practices.
According to Payong Srivanich, chairman of the Thai Bankers’ Association (TBA), the banking sector has fully adhered to directives from relevant agencies regarding the monitoring and investigation of potentially unlawful financial activities. These efforts include combating online scams and other forms of financial fraud.
To enhance their capabilities, banks have upgraded their “Know Your Customer” (KYC) systems. These updates reflect current circumstances and incorporate advanced technologies designed to prevent financial fraud and scams. By improving KYC procedures, banks are better equipped to identify and mitigate risks associated with grey money.
Financial transactions and transfers are subject to oversight by several regulatory bodies, including the Bank of Thailand, the Anti-Money Laundering Office, and the Securities and Exchange Commission. Additionally, banks must comply with international compliance standards to maintain a robust financial system.
However, the central bank’s tracking of money trails and financial transactions currently applies only to regulated financial institutions. To address this limitation, Mr. Payong emphasized the need for related regulatory agencies involved in online scam prevention to share information under the government’s “Connect the Dots” framework. This collaboration is essential for strengthening crime prevention efforts across sectors.
Mr. Payong also highlighted the potential need for legal amendments, such as revising the Personal Data Protection Act, to better address emerging challenges. Introducing new regulations, particularly those governing digital assets and cryptocurrencies, may also be necessary to adapt to the evolving financial landscape.
On Tuesday, the central bank announced intensified efforts to tackle grey money—funds linked to suspicious or unlawful activities—by tightening monitoring and oversight measures throughout the financial system. According to central bank governor Vitai Ratanakorn, the regulator is enhancing its processes for detecting and investigating undesirable transactions. This is aimed at addressing the growing problem of illicit funds and preventing the use of Thailand’s financial system for illegal purposes.
Key measures include enhanced customer due diligence, where commercial banks are urged to place greater emphasis on verifying and investigating suspicious transactions involving deposits or transfers. For example, accounts used in online gambling or operated by scammers are being closely monitored.
The central bank will also tighten regulatory scrutiny of financial service providers under its supervision. This includes authorised money transfer agents, authorised money changers, e-wallet operators, and entities involved in gold transactions that may be linked to illicit activities. These steps are intended to ensure comprehensive tracing and monitoring of financial flows connected to fraud or corruption.
By implementing these measures, the central bank aims to stay ahead of the evolving nature of financial crime and protect the integrity of Thailand’s financial system. The focus remains on creating a secure environment that deters illegal activities while supporting legitimate financial operations.