The People Bank of China (PBOC) has said it is postponing the introduction of new rules that firm up cash withdrawal and deposit scrutiny due to technical reasons.
According to China Macro Economy, the new regulation which was previously anticipated to take effect on March 1 will require people who make a single cash deposit or withdrawal that exceeds 50,000 yuan ($7,927) to report the source and intended use of money.
In addition, banks and other licensed financial institutions that handle relevant transactions must validate and store client information, according to a joint order issued by PBOC, the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission.
Despite this legislation, the PBOC recently issued a notice that said the new rules would be delayed and transactions would continue under current protocols, which only require banks to check the identification of a person.
The notice said, ?After the promulgation of the regulation, some small and medium-sized financial institutions raised that it puts forward specific standards and requirements on a variety of financial products and business models, and financial institutions need to revise and improve their internal management systems, information systems, business processes, and conduct personnel training.p>
Earlier in February, the PBOC has stressed that the new regulation would not affect the normal cash deposit and withdrawal needs of individuals, with the main purpose being to curb activities such as money laundering. However, the low cap for mandatory disclosure has sparked outrage from the public over the potential for surveillance overreach.
Undisclosed experts have said the regulation will effectively infringe on individual property rights by giving financial institutions the power to restrict deposits and withdrawals at their discretion. Furthermore, analysts argued it may also mute capital flows and impede the economic recovery of China.
The PBOC latest statement has said it will continue to guide financial institutions in strengthening AML capabilities, enhance the effectiveness of financial services to help the real economy while also preventing financial risks.
Copyright ? 2022 FinTech Global
