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Terror funding crackdown to ‘kill local businesses’

The war on terrorism and money laundering could to drive hundreds of local money remitters out of business after Westpac confirmed that it would soon cancel banking arrangements with the sector.

Westpac is the last of the major banks to terminate relationships with hundreds of money transfer companies following similar moves by Commonwealth Bank, ANZ and NAB in recent years.

Ramanathan Karuppiah, a spokesman for a newly-formed industry group known as the Currency and Remittance Providers Association of Australia believes that at least 200 Australian businesses will be forced to close by the end of November, costing thousands of jobs.

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“This industry is dying in the next month,” he said.

“I think this is an unintended consequence of recent regulatory actions – we have been doing all that we have been asked to do by law enforcement agencies.

“Our members have been given from one month to six weeks to find other banking arrangements.”

The Australian Bankers’ Association recently highlighted concerns with the remittance industry, saying that international and national demands by regulators had become more intense.

Westpac spokesman Danny John would not reveal how many remitters would have their accounts at the bank terminated but said the bank had decided to reduce its exposure to the industry.

Mr Karuppiah said the blanket ban on remitters’ access to bank accounts would retard their ability to execute foreign money transfers.

He revealed that his own business had invested around $1.5 million since it was established in 2007.

It now employs 25 people across eight branches in Queensland and the Northern Territory.

The industry shakeout may deliver a windfall to large money transfer players such as Western Union and MoneyGram.

Data published last year by the World Bank found that remittance providers sent more than $US 5 billion from Australia in 2012. The sector also relayed more than $US 2 billion of funds to Australians in the same year.

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