Commonwealth Bank switches $20,000 deposit limit in favour of daily cap

CBA is switching to a daily deposit limit, as it ups its defences against crime in the wake of the Austrac scandal.

Commonwealth Bank ATM in downtown Brisbane. (Picture: Annette Dew)

Commonwealth Bank is starting to emerge from its anti-money laundering nightmare, ditching its controversial, $20,000 limit on deposit transactions in favour of a daily limit for each cardholder.

While the limit stays at $20,000, the new policy — to be introduced tomorrow and a first among the major banks — helps address the problem of criminal networks using smart ATMs to make multiple cash deposits.

CBA’s deposit limit is higher than the $5,000 maximum set by its peers and compares to the $10,000 trigger for a threshold transaction report (TTR) to the financial crime regulator Austrac.

Despite famously running foul of Austrac in August when the regulator took legal action over CBA’s failure to lodge 53,506 TTRs, the bank has consistently said that its higher deposit limit wasn’t the core of the problem.

It argued that customers intent on laundering cash could simply make multiple deposits below the TTR threshold.

The bank also said it became unstuck because a coding error was made in the rollout of its smart ATMs, with the technology that triggers a TTR inadvertently switched off.

Once the error was discovered and the software was switched back on in 2015, the required TTRs were lodged with the regulator.

CBA’s switch to a daily deposit limit for each cardholder, foreshadowed in a small advertisement in The Australian today, is a step up in the never-ending battle against financial crime.

The advertisement that appeared in The Australian

It also shows the bank is trying to wrest back some of the initiative after a nightmare run since August, when Austrac triggered a share-price slump by launching Federal Court proceedings over multiple alleged breaches of anti-money laundering legislation.

CBA is scheduled to lodge its defence on December 15.

A bank spokesman said this morning that the new policy would deter criminal behaviour while continuing to meet customers’ legitimate banking needs.

“Flexibility around how and when deposits can be made is important for a range of our customers, particularly small business owners who rely on after-hours facilities to deposit end-of-day or week takings securely,” he said.

“We are the first major bank to introduce daily limits for cash deposits at our deposit ATMs and this change is one important step in the reduction and management of money laundering risks.”

CBA chair Catherine Livingstone, who apologised to shareholders at last Thursday’s annual meeting for the “deficiency and consequence” of the money laundering debacle, announced in August an upgrade of the financial technology used to monitor accounts and transactions for suspicious activity.

She said the new technology would be delivered over the next 12 months at a cost of $40 million.

Richard Gluyas’ next Four Pillars column will be in tomorrow’s paper