New rules for cash deposits and withdrawals take effect on 1 March 2022, when the Measures for Customer Due Diligence and for Keeping Customer Identity Information and Transaction Records, issued by the People’s Bank of China and two other regulators, come into force.
Under the measures, commercial banks, rural cooperative banks, rural credit cooperatives and village banks must identify and verify the customer’s identity, and record the source or intended use of funds, for any single cash deposit or withdrawal by an individual above RMB 50,000 or the equivalent of USD 10,000 in foreign currency.
The topic quickly trended on Weibo after the announcement.
Why the rules exist
In short: anti-money-laundering. Regulators said changing financial products and business models have created new challenges, and the measures improve the AML regulatory system and the ability to prevent money laundering and terrorist financing.
The same day the measures were issued, the PBoC, the Ministry of Public Security and nine other departments announced a three-year nationwide campaign against money laundering crimes, running from January 2022 to December 2024.
Large-cash management pilots had already run since July 2020 in Hebei (registration for individual deposits and withdrawals above RMB 100,000) and since October 2020 in Zhejiang (RMB 300,000) and Shenzhen (RMB 200,000), for two-year trial periods.
Cash is anonymous and hard to trace, which makes large amounts attractive for money laundering and tax evasion, noted Dong Ximiao of China Merchants Union Consumer Finance. With cashless payment so convenient, cash use keeps falling and ordinary savers rarely move large amounts of cash anyway. The new rules, aligned with international standards, help fight illegal cash use and maintain financial security.
Impact on ordinary customers
Dong argued the impact is small: individuals rarely deposit RMB 50,000 in cash now, since mobile payments and the digital yuan pilot cover daily needs. Those who do simply fill in a large-cash form – selecting the purpose for withdrawals or the source for deposits – with no supporting documents required, so the extra friction is minimal.
Many netizens expressed support, saying honest customers have nothing to worry about and the rules help stop criminals laundering money.
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