Thai central bank targets money flows behind scam networks

Thailand's central bank is intensifying efforts to track and halt illicit financial flows, particularly those generated by scams and other illegal activities that have proliferated across Southeast Asia. On September 10, the Bank of Thailand (BOT) joined 11 financial-sector entities, including banks, non-bank lenders, payment providers, and money changers, in a coordinated effort to prevent the financial system from facilitating criminal proceeds.

All parties committed to tightening customer and merchant checks, scrutinizing high-risk transactions more closely, and leveraging data and technology to identify suspicious activities. They will also enhance information sharing on criminal patterns and warning signs, while cooperating more closely with regulators and law enforcement.

BOT Governor Vitai Ratanakorn stated, "We cannot arrest them, but we can strengthen our systems, create bottlenecks and make it more difficult for them to move illicit funds." He emphasized that while illicit transactions are unlikely to vanish entirely, the initiative aims to reduce their prevalence. The expanded crackdown targets "grey money," encompassing earnings from online scams, gambling, and corruption that can traverse bank accounts, physical cash, gold, and digital assets.

Thailand's focus on combating illicit flows has gained momentum under Vitai, who has broadened the central bank's purview beyond monetary policy to address structural issues that jeopardize financial stability and economic growth. Earlier this year, the BOT bolstered oversight of gold transactions to facilitate better tracking of large flows and curb speculative gold trading, which officials claim exacerbates fluctuations in the baht.

BOT's actions are designed to mitigate speculative gold trading that can amplify swings in the baht.