Surge in remittances to China via S'pore banks after Beijing crackdown

Transfers with DBS, OCBC up 60% or more as workers seek safer ways to send money

- Chor Khieng Yuit

Chinese migrant workers are using Singapore banks to send money home after a crackdown by Beijing last year affected transfers handled by some remittance firms here.

DBS Bank and OCBC Bank say remittances to China surged around 60 per cent or more in the first two months of the year, compared with the same period in 2023.

UOB did not give details on China transfers but noted that digital remittances to its top five destinations and China "experienced double-digit growth" in the first quarter of 2024.

The crackdown reportedly froze around 670 remittances totalling $13 million made from an undisclosed number of firms here, including Samlit Moneychanger.

It is not clear if all the funds have since been released by the Chinese authorities.

The affected transfers were made by remittance companies that engaged third-party agents instead of banks to keep transaction costs low.

The Monetary Authority of Singapore (MAS) said in December 2023 that the 670 cases represent "a very small proportion" of remittances to China, but it suspended the use of such non-bank and noncard channels from Jan 1 to March 31, 2024 to minimise risks to consumers.

The measure worked, with the MAS noting on March 27 that there have been no new reports of frozen remittances since Jan 1. However, it has extended the ban until Sept 30.

This means transfers must still be done through banks or card network operators like UnionPay International.

Licensed payment service providers and remittance agencies can also remit money to China if they do so through a bank or a card network operator.

Remittance agencies say there has been some confusion among their customers who thought they could not use these remittance companies to send money home.