MAS Implements Temporary Ban on Non-Bank Channels for Singapore-China Remittances Amidst Frozen Account Concerns

Singapore’s MAS issues a 3-month suspension on non-bank channels for remittances to China due to concerns over frozen accounts. The directive aims to protect consumers, prompting remittance companies to exclusively use banks or card networks. MAS advises the public to use alternative channels during the 14-day adjustment period.

20 December 2023 – The Monetary Authority of Singapore (MAS) has issued a notice instructing licensed payment service providers offering cross-border money transfer services to suspend the use of non-bank and non-card channels when transmitting funds to individuals in the People’s Republic of China (PRC). The three-month suspension, effective from January 1, 2024, aims to address concerns arising from a small number of remittances to China, primarily by PRC nationals in Singapore, being frozen in beneficiaries’ bank accounts in China.

To ensure the immediate protection of consumers, MAS has directed remittance companies to exclusively engage banks, card networks (e.g., Union Pay International), or licensed financial institutions linked to banks or card networks for cross-border money transfers to China during this period. While acknowledging the potential increase in transaction costs, MAS emphasizes the necessity of this measure to minimize risks and prevent further cases of frozen accounts.

MAS has actively engaged with the affected remittance companies, urging them to assist affected customers, enhance complaint-handling processes, and review existing partnerships for the PRC remittance corridor. The temporary suspension, effective 14 days from the notice (January 1, 2024), allows remittance companies to adjust their practices, and existing remittances will be allowed to conclude within this timeframe.

The public is cautioned against hasty remittances through overseas third-party agents during the 14-day adjustment period. MAS advises individuals to utilize alternative channels, such as banks or card networks, to prevent inadvertent freezing of funds or accounts. The authority will closely monitor the situation and may extend or terminate the suspension after March 31, 2024, taking further measures if deemed necessary.

Author: Terry KS

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