China province orders new checks on big cash transactions after bank runs
- New rules requiring documentation of large deposits and withdrawals is being rolled out in Hebei and will be extended to Zhejiang and Shenzhen
- Depositors will have to say where they got the money from while withdrawer will have to say what they intend to do with the cash
China has launched a pilot programme in the northern province of Hebei requiring the public to apply for approval if they plan to make large cash deposits or withdrawals at commercial banks.
From July 1, residents in the province will need to provide information about the source of deposits or the purpose of withdrawals for transactions over 100,000 yuan (US$14,162) for individuals, and 500,000 yuan for corporations, the state-backed China Securities Journal reported last week.
Applicants will have to give one day’s notice to the bank to make a withdrawal of this size or larger, and gain the branch’s approval of the registration information, the report said.
The pilot programme will be expanded to Zhejiang province in the east and the city of Shenzhen in Guangdong province from October 1, affecting individual account transactions of more than 300,000 yuan and 200,000 yuan, respectively.
The measures were aimed at curbing unreasonable demand for large amounts of cash to keep the risks to China’s banking and economic system in check, the report said.
