A new directive from the People’s Bank of China (PBOC) calling for the registration of deposits and withdrawals beyond a set threshold has triggered intense response on Chinese social media.
Sina Weibo recently became abuzz with searches on the topic of “personal deposits and withdrawals exceeding 50,000 yuan,” in response to recent moves by PBOC to step up scrutiny of cash banking operations.
On 27 January PBOC announced the approval of the “Financial Institution Customer Due Diligence and Customer Identification Information and Transaction Record Storage Administrative Measures” (金融机构客户尽职调查和客户身份资料及交易记录保存管理办法), which are scheduled to come into effect at the start of March.
The Measures require that financial institutions including commercial banks and rural credit societies adopt additional measures to verify and record the identities of clients making deposits or withdrawals of over 50,000 yuan, or USD$10,000 in foreign currency.
In addition to extra verification of client identity, banks are also required to register the sources of such funds and their intended usage.
In response to social media buzz surrounding the move, a spokesperson from PBOC said that the new rules will “not impact the regular cash deposits and withdrawals of Chinese residents, and the convenience of operations will not be affected.”
“Under normal circumstances financial institutions will not require customers to fill in information or provide evidentiary materials…they will only make simple inquiries to handle registration of information in related to cash withdrawals or deposits on behalf of customers directly.”
According to PBOC deposits and withdrawals in excess of 50,000 yuan currently comprise around 2% of all cash deposit and withdrawal transactions, meaning the impact of the new requirements will be modest.
PBOC said that the move is part of efforts to improve China’s money-laundering and fraud prevention measures, particularly during its push for greater opening of the domestic financial sector.
“The main goal is the early prevention and containment of criminal activities such as money-laundering, and the protection of the security and interests of funds belonging to the public,” said a PBOC official.
“In recent years e-mail fraud, illegal fund-raising, illegal advertising, cross-border gambling and underground banking have become comparatively rampant, severely threatening the public interest…in 2021 alone, public security authorities investigated over 370,000 email fraud cases throughout the country.
“Financial authorities should appropriately strengthen their administration of deposit and withdrawal activities, which will be of benefit to preventing criminal activities and protecting the fundamental interests of the greatest amount of the public.”