On April 1, 2026, a Bank of Thailand (BOT) notification took effect designating cash withdrawals and uncrossed cheque encashments of 5 million baht (approx. USD 140,000) or more per day as “high-risk transactions” at commercial bank branches. Enhanced Due Diligence (EDD) now requires customers to explain the source and purpose of funds and provide supporting documents. If a customer cannot provide a reasonable explanation, banks must refuse the transaction and report to the Anti-Money Laundering Office (AMLO).
While media coverage has framed this primarily as a measure targeting wealthy individuals, 5 million baht is a threshold that Japanese companies with cash-intensive operations — construction, retail, food service, wholesale, logistics — can easily reach on peak payment days. The notion that “splitting transactions” avoids the rule is a misconception that creates separate AML risks.
The Regulation — What, When, and How Far
Overview
The BOT published its notification in the Royal Gazette on March 19, 2026, with an effective date of April 1, 2026. According to the Bangkok Post and Nation Thailand, the regulatory framework is as follows.
Covered and Excluded Transactions
| Category | Transaction Type | Regulated? |
|---|---|---|
| Covered | Cash withdrawal at bank branch | Yes |
| Covered | Uncrossed cheque encashment | Yes |
| Covered | Cashier’s cheque issuance/encashment | Yes |
| Excluded | Digital transfers / internet banking | No |
| Excluded | Crossed cheque deposit to account | No |
Crossed cheques are excluded because they can only be deposited into the payee’s account, making the fund flow traceable.
Threshold Calculation
The threshold is 5 million baht or more per day — calculated as a daily aggregate, not per transaction. If you withdraw 3 million baht in the morning and 2 million in the afternoon, the 5 million baht threshold is triggered. This design intentionally renders transaction splitting ineffective.
Enhanced Due Diligence (EDD) Requirements
ID Verification for All Cash Transactions
According to the Nation Thailand, ID verification is required for all cash transactions at bank branches regardless of amount: ID card/passport, signature, and contact details at the counter; PIN, OTP, or biometric authentication for electronic channels.
Additional Requirements for 5 Million Baht+
When daily cash transactions reach 5 million baht or more, the following additional checks apply:
- Source of funds — where the money comes from
- Purpose of transaction — why cash withdrawal is necessary
- Updated information on business activities, occupation, and beneficial owner
- Supporting documents — contracts, invoices, purchase orders, payroll records, etc.
Consequences of Insufficient Explanation
If the bank cannot obtain a reasonable explanation and the customer fails to provide supporting documents:
- The bank must refuse the transaction
- The bank must file a Suspicious Transaction Report (STR) with AMLO
- Funds may be temporarily held pending AMLO instructions
The Nation Thailand (April 1, 2026) reported that the BOT clarified a refused transaction does not result in an account freeze. Where a reasonable basis exists, the bank may offer alternatives such as limiting the withdrawal amount or redirecting to traceable payment methods.
”Splitting Avoids the Rule” Is a Misconception
Some may wonder: “Can I just withdraw 4.99 million baht across multiple days?” This is counterproductive.
Under the Anti-Money Laundering Act (AMLA) B.E. 2542 (1999), intentional transaction splitting (structuring / smurfing) designed to circumvent regulatory thresholds is itself treated as suspicious activity. Banks are obligated to monitor for abnormal transaction patterns, and repeated near-threshold cash withdrawals trigger STR obligations.
Comparison with Japan: Japan’s Act on Prevention of Transfer of Criminal Proceeds similarly treats transactions split to avoid identity verification as reportable suspicious activity (per the “Reference Examples of Suspicious Transactions” published by the National Police Agency). This is not a Thailand-specific rule but an international standard aligned with FATF (Financial Action Task Force) requirements.
Comparison with Japanese Law
| Item | Thailand (BOT notification) | Japan (Act on Prevention of Transfer of Criminal Proceeds) |
|---|---|---|
| Threshold | 5 million THB/day (approx. JPY 21.5 million) | JPY 2 million+ per cash transaction |
| Calculation | Daily aggregate | Per transaction |
| Scope | Cash withdrawals + uncrossed cheque encashment | Cash receipts and payments |
| EDD equivalent | Source of funds, purpose, beneficial owner, supporting docs | Strict customer management (Article 4, Paragraph 2) |
| Cheques | Uncrossed cheques explicitly covered | Cheque use has largely declined |
While Thailand’s threshold appears higher in absolute terms, the daily aggregate calculation means that multiple withdrawals across branches or transactions can trigger it. Japanese companies should be particularly aware of this when cash payments cluster on specific days.
A Thailand-specific point: uncrossed cheques are explicitly regulated. While cheque use has declined significantly in Japan due to digitization, Thai commercial practice still relies heavily on cheques for B2B payments and payroll. Japanese expatriates unfamiliar with Thai cheque conventions may find their transactions unexpectedly blocked.
Practical Scenarios and Responses
1. Construction Site Worker Payments
Large construction projects often pay daily or short-term workers in cash. Withdrawals exceeding 5 million baht on paydays will require additional documentation and source-of-funds explanation.
Response: Consider transitioning to bank transfers or prepaid electronic payment systems.
2. Retail Cash Revenue Handling
Depositing cash sales revenue at the bank is not the primary target of this regulation (which focuses on withdrawals). However, depositing and then withdrawing in cash would trigger the rules.
3. Cash Payment for Procurement
Cash payments to suppliers requiring large withdrawals may trigger document requests — contracts, invoices, and purchase orders.
Response: Systematize document management. Shift to bank transfers where possible. See also payment terms in sale agreements.
4. Expatriate Personal Account Advances
Japanese expatriates who withdraw large sums from personal accounts for company expenses — later reimbursed — are subject to this regulation as individuals. They must explain the source and purpose of funds personally.
Response: Transition to direct company account payments. If personal advances continue, maintain rigorous expense reconciliation. See also personal banking in Thailand.
5. Receiving Remittances from Japan + Cash Withdrawal
Receiving a remittance from Japan is a digital transfer and falls outside this regulation. However, converting it to cash at a Thai bank branch triggers the rules.
Response: Process local payments via transfers and digital channels; minimize cash conversion.
Related Regulatory Developments
Money Changer Limits
As a separate but concurrent measure, the BOT has imposed daily cash exchange limits on money changers. According to the Bangkok Post and newsclip:
- Normal areas: 800,000 baht per person per day
- Border areas (Myanmar, Cambodia, Laos): 200,000 baht per person per day
The Broader AML Context
This BOT notification is part of a series of AML-related measures from late 2025 through early 2026, addressing money laundering, digital fraud (cutting off cash-out routes for call center and online fraud proceeds), “grey capital” flows in border regions, and preparation for FATF mutual evaluation (Thailand is a member of the Asia/Pacific Group on Money Laundering, APG).
Five Items for Japanese Companies to Check Now
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Know your cash transaction volume — identify peak-day amounts, not just monthly averages
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Evaluate the shift from cash to digital payments — bank transfers improve both regulatory compliance and audit readiness
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Review cheque practices — if you use uncrossed cheques, consider switching to crossed cheques, which are exempt from this regulation
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Restructure expatriate advance schemes — personal account withdrawals carry personal explanation obligations; transition to direct company payments
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Prepare source-of-funds documentation — ensure contracts, invoices, purchase orders, and payroll records are organized and readily available when requested by the bank
For inquiries on AML compliance, bank relations, and financial regulatory matters in Thailand, we provide advice covering both Japanese and Thai law — from practical solutions tailored to Japanese companies’ accounting operations to responding to transaction refusals and AMLO reports. We work in collaboration with JTJB International Lawyers’ Thai-qualified attorneys. Please feel free to contact us.
This article is for general informational purposes about Thailand’s legal system and does not constitute legal advice under Thai law. The interpretation and application of BOT notifications and AMLA may change. For specific matters, please consult a Thai-qualified legal professional. Our firm works in collaboration with JTJB International Lawyers’ Thai-qualified attorneys.