SINGAPORE – The use of non-bank and non-card channels by remittance companies to send 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 (December 18), the Monetary Authority of Singapore (MAS) said the directive was issued to minimise risks for consumers sending money to China. It follows reports in recent months that remittances from individuals to China made through remittance companies in Singapore have been frozen in recipients’ bank accounts by law enforcement authorities in the People’s Republic of China.
According to the policy, Singapore remittance companies that provide cross-border money transfer services to China for individuals may only use a bank or card network operator, or a licensed financial institution that has used a bank or card network operator, to assist in the money transfer.
Although such methods impose higher costs for customers to transfer funds, MAS said the suspension of non-bank or non-card channels was necessary to protect consumers and curb the number of new cases reported in China where recipients’ accounts were frozen.
Cases of frozen funds
According to MAS, such transfers account for a “very small proportion” of cases and funds 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 had been actively engaging with the remittance companies involved.
Remittance companies were instructed to provide necessary assistance to affected customers and to improve their complaint handling processes. Companies were also instructed to review existing agreements with PRC remittance corridor partners in light of such complaints and the impact on customers.
In a joint statement with MAS, the Singapore Police Force (SPF) said it had received more than 670 reports of frozen remittances as of December 15, 2023, with the total amount involved being around S$13 million. About 430 of the reports were against Samlit Moneychanger Pte Ltd.
To keep transaction costs low, SPF said the remittance companies processed the affected overseas transfers through overseas licensed agents rather than through a direct bank transfer from Singapore to China.
The public was warned against hastily transferring money to China via foreign third-party agents before January 1, 2024. Instead, individuals were advised to use other channels, such as banks or card networks, to send money to China to avoid inadvertent freezing of funds or accounts.
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