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Remittance to China: MAS to temporarily suspend non-bank and non-card channels for sending money to China
The suspension will take effect from 1 January to 31 March 2024, the Monetary Authority of Singapore (MAS) said.
SINGAPORE — The use of non-bank and non-card channels by remittance companies to transmit money to persons in the People's Republic of China (PRC) will be temporarily suspended from 1 January to 31 March 2024.
In a notice issued on Monday (18 December), the Monetary Authority of Singapore (MAS) said the directive was given to minimise risks to consumers remitting funds to China, following reports of remittances to China made by individuals through remittance companies in Singapore being frozen in their beneficiaries' bank accounts by the PRC enforcement agencies in recent months.
Following the directive, Singapore remittance companies providing individuals with cross-border money transfer services to China may only engage a bank or an operator of a card network, or a licensed financial institution that has engaged a bank or an operator of a card network, to assist in the transmission of money.
Although such methods will cost customers more to remit funds, MAS said that suspending non-bank and non-card channels was necessary to protect consumers and stem the number of reported new cases of beneficiaries' accounts in China being frozen.
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Cases of frozen funds
According to the MAS, such remittances comprised a "very small proportion" of cases and monies sent through these channels are successfully deposited in most cases. The central bank added that it was not clear why these funds had been frozen and that it has been actively engaging the remittance companies involved.
Remittance companies have been advised to render the necessary assistance to affected customers and to strengthen their complaints-handling process. The companies have also been instructed to review existing arrangements with partners for the PRC remittance corridor in view of such complaints and the impact on customers.
In a joint statement with the MAS, the Singapore Police Force (SPF) revealed that as of 15 December 2023, it has received more than 670 reports of remittances being frozen, with a total affected amount of around S$13 million. About 430 of the reports were against Samlit Moneychanger Pte Ltd.
To keep transaction costs low, SPF said that the remittance companies processed the affected outward remittances through overseas licensed agents and not through a direct bank transfer from Singapore to China.
Members of the public have been cautioned against rushing to remit monies to China through overseas third-party agents before 1 January 2024. Instead, individuals have been advised to use other channels for remittances into China, such as through banks or card networks, to prevent any inadvertent freezing of monies or accounts.
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