ABA urges tougher penalties for illegal money-transfer firms

The Asian Bankers Association (ABA) is urging central banks in the Asia-Pacific region to impose tougher penalties on illegal money-transfer firms. “At the moment, the illegal channels are much bigger than the legal channels for money transmission. Regulators are called to strengthen mechanisms [against informal channels] and make it difficult for illegal money transfers to take place,” said ABA advocacy committee chairperson Dilshan Rodrigo. In a press briefing, Rodrigo said that the amount of remittances going through ilegal firms exceed remittances going through banks and legal money-transfer firms by as much as 30 to 40 percent. The ABA added that dealing with unregistered money-transfer agents leaves senders and recipients more open to fraud. Remittance facilitation has become a very important business for banks, especially in countries such as the Philippines that have a large portion of the workforce working overseas and sending money back to their families. According to the National Statistics Office, some 2.2 million Filipinos are currently abroad as overseas workers. The Philippines is the world’s fourth-biggest recipient of remittances after China, India, and Mexico. In 2011, remittances sent to the Philippines through banks amounted to $20 billion. — BM, GMA News