Bank of Thailand pushes proactive grey money crackdown, builds bottlenecks to block illicit funds
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Dr. Don Nakornthab, Assistant Governor of the Monetary Policy Group at the Bank of Thailand, explained on Facebook why the central bank must tackle grey money, stating that grey money is not merely a crime problem but a threat to long-term macroeconomic stability. If large amounts of capital are allocated to illegal businesses and corruption instead of flowing to promising SMEs, investment in education, public health, and infrastructure, it will drag down the economy's growth potential and undermine confidence in the financial institution system and the payment system. Dr. Don stated that tackling grey money is one of four targeted financial measures added by Governor Vitai Ratanakorn as a fourth arrow, following Japan's three-arrow model. The Bank of Thailand acts as coordinator, examiner, and builder of bottlenecks for grey money flowing through supervised institutions, such as cash withdrawals and, in the future, cash deposits exceeding five million baht, which must be accompanied by an explanation of purpose and origin. Most recently, the Bank of Thailand and businesses under the supervision of 11 agencies jointly declared their intent under a cooperation framework to prevent illegal transactions in the financial sector, with the Securities and Exchange Commission, the Anti-Money Laundering Office, the National Anti-Corruption Commission, and the Royal Thai Police also participating. Dr. Don stated that the Bank of Thailand's key challenge is finding the balance between creating bottlenecks to block grey money and facilitating honest businesses and citizens, citing an interview with Governor Vitai who said the central bank may not have the power to suppress or arrest, but it can block these bad things to make them harder to occur and create higher costs.