I agree. The fact that the cash crossed the teller window and was in the customer's possession completes the cash-out transaction. When the cash crossed the teller window the second time, it's a separate transaction (cash-in) once it's back in the hands of the bank, even if it's clearly the same physical cash. Report both transactions on your CTR.
Would it have been more efficient to simply debit the deposit account and credit the loan account, so that no cash is involved? Of course it would. But that's not what happened.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8