Chinese Banks Tighten Foreign Cash Withdrawals, Heighten Customer Scrutiny

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The Chinese central bank has tightened its capital controls, with domestic lenders ordered to increase their scrutiny of frequent US cash withdrawals by customers.

A video clip that went viral in early May shows a teller at a branch of China Merchants Bank (CMB) refusing to allow an enraged customer to remove USD$200 from a dollar-denominated account.

The outraged customer claimed that she was still well within her annual quota for US dollar cash withdrawals, with the refusal from the hapless bank teller prompting her to film the exchange on her mobile phone.

A senior executive from state-owned lender Bank of Communications said to South China Morning Post said that bankers had received instructions from the Chinese central bank to tighten foreign currency.

According to the executive the threshold for scrutiny of US dollar cash withdrawals was reduced from $5000 to $3000 starting from late last year.

Any individual cash withdrawals above this benchmark require customers to provide proof of their purpose, such as tickets for overseas travel or certificates pertaining to foreign medical treatment.

The Chinese central bank has also required that lenders keep a “watch list” of customers making frequent withdrawals of foreign exchange.

A report fromĀ Sina cited CMB sources who said that the customer responsible for the viral footage had made $49,800 in withdrawals via six transactions over the past eight months, prompting her inclusion on the watch list.

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