A bank staff member checks RMB banknotes at a bank in Lianyungang, East China's Jiangsu Province. File Photo:Xinhua

China's central bank said Wednesday that normal cash deposits and withdrawals will not be affected, in response to the recent regulation that requires individuals to validate their identity when making a cash withdrawal or deposit on a single transaction of 50,000 yuan ($7,860) or more.

The main purpose of implementing the regulation is to prevent and curb illegal and criminal activities like money laundry and protect the safety and interests of people's money, China's central bank further stated.

When handling cash deposits and withdrawals on a single transaction of 50,000 yuan or more, or on foreign currency equivalent to up to $10,000, the identity of the individual customer shall be confirmed and verified, and the source or purpose of the funds shall be registered, according to the jointly order issued by the People's Bank of China, the China Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission on January 19. The order will take effect on March 1.

The new regulation drew immediate attention and debate online. Many expressed their support to the strict but necessary approach to tackle money laundry and other related illegal activities.

In recent years, illegal and criminal activities like telecommunications fraud, illegal fundraising and cross-border gambling have become rampant, seriously endangering public interest. In 2021 alone, the public security organs investigated and handled more than 370,000 telecom fraud cases, according to media reports.

Strengthening the management of cash deposits and withdrawals is based on the requirement for financial institutions to fulfill their anti-money laundering obligations while complying with international standards for anti-money laundering, the central bank said.

Moreover, in general terms, the order is expected to produce a very limited impact on customers' business given the fact that cash deposits and withdrawals over 50,000 yuan in China only account for about two percent of all cash deposits and withdrawals.

While conscientiously fulfilling the anti-money laundering obligations, the central bank will guide financial institutions to formulate detailed implementation rules, including validating identification of customers only when it is necessary and at the minimum level to avoid putting an extra burden on customers.