China imposes pre-checks on large bank transactions

The PBOC hopes to keep systematic risks at bay.

The People’s Bank of China (PBOC) has kicked off a programme that would require retail and business clients to pre-report any large withdrawals or deposits, reports Bloomberg.

The programme was piloted in Hebei Province and will expand to Zhejiang and Shenzhen in October. It hopes to strengthen monitoring of “unreasonable demands of large amounts of cash” to keep systematic risks in check, the PBOC said.

The plan will require businesses to provide information on transactions exceeding $71,000 (CNY500,000). For individuals, the threshold spans from $14,266 (CNY100,000) to $43,000 (CNY300,000) depending on the region.

Chinese banks are battling a surge in bad debt with the economy set to expand at its slowest in four decades. Authorities stepped in last month to stop bank runs at two lenders in Hebei and Shanxi, in addition to the bailout of several embattled banks last year.

Here’s more from Bloomberg.