China has designated three pilot areas to regulate cash transactions in large amounts amid efforts to strengthen cash circulation management and curb illegal activities, the central bank said.
Hebei Province will start the two-year pilot program in July, while Zhejiang Province and the city of Shenzhen will start the experiment in October, according to a plan released by the People's Bank of China.
All three pilot areas will regulate cash transactions of 500,000 yuan or above for business accounts.
For personal accounts, Hebei, Zhejiang and Shenzhen have set the thresholds of regulation at 100,000 yuan, 300,000 yuan and 200,000 yuan, respectively.
The pilot program will encourage reservation-based cash withdrawals in large amounts, establish a system that records, analyzes and supervises large cash transactions, and prevent risks related to such transactions.
With the pilots, the country aims to meet the needs of social and economic development, further improve the cash flow environment and reduce the cost of social management, according to the central bank.
It added the thresholds are set to strengthen the monitoring of abnormal cash transactions including those related to tax evasion or dodging supervision, while still meeting the reasonable cash demands of businesses and individuals.
The central bank also said that the regulations will not significantly affect normal daily economic activities as multiple payment alternatives are readily available.
Besides, the set thresholds are higher than most people's daily cash use, and large cash transactions are not restricted as long as the customers comply with registration rules.
A bank employee stacks yuan banknotes
The pilot program will encourage reservation-based cash withdrawals in large amounts, establish a system that records, analyzes and supervises large cash transactions, and prevent risks related to such transactions.
