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New regulation of personal cash deposits & withdrawals in China
From March 1, 2022, “the measures for the administration of customer due diligence of financial institutions and the preservation of customer identity data and transaction records” issued by the central bank and other three departments will be officially implemented.
The Measures stipulate that if commercial banks, rural cooperative banks, rural credit cooperatives, rural banks and other financial institutions handle a single cash deposit and withdrawal business of more than 50,000RMB or a foreign currency equivalent of more than 10,000USD for natural person customers, they shall identify and verify the identity of the customers, understand and register the source or purpose of the funds.
Why introduce such an approach? In a word, it is for anti money laundering.
Previously, the central bank has piloted large amount cash management in Hebei Province since July 1, 2020 and in Zhejiang Province and Shenzhen since October 1, 2020. Hebei personal deposit and withdrawal of more than 100,000 RMB, Shenzhen personal deposit and withdrawal of more than 200,000RMB, Zhejiang personal deposit and withdrawal of more than 300,000RMB should be registered. The pilot period is 2 years.
There is no doubt that anti money laundering efforts are escalating.
However, the new method has little impact on ordinary customers. First, there are really few personal deposits and withdrawals of 50,000RMB in cash. Diversified non cash payment methods such as mobile payment and digital RMB in the pilot can meet people’s daily needs without using cash. Secondly, even if you need to deposit and withdraw more than 50,000RMB in cash, you just need to fill in an additional large cash business form. You should check the purpose of withdrawal and the source of deposit. There is no requirement to issue supporting materials, which has little impact on the convenience of deposit and withdrawal.
In addition, two private banks have announced that they will suspend cash business.
Resource from <China News Network>