China will reportedly require individuals and companies in certain provinces to obtain approval before making large deposits or withdrawals at commercial banks amid ongoing bank runs and bailouts.
Effective last week, residents from the northern province of Heibei will have to provide information regarding the source of deposits and the purpose of withdrawals if the amount exceeds 100,000 yuan ($14,200) for individuals and 500,000 yuan ($71,000) for companies, according to a report from state-backed «China Securities Journal».
The pilot gram will kick off Hebei before being rolled out to the eastern Zhejiang province and Shenzhen city on October 1, the report added.
Bank Runs
In addition to the bailouts of Baoshang Bank, Bank of Jinzhou and Hengfeng Bank last year, China has seen bank runs from Hong Kong-listed Bank of Gansu, which raised HK$6 billion ($770 million) in early 2018, and Yingkou Coastal Bank in Liaoning province.
The two bank runs in the year led to local government and police from the banks’ respective originating cities pleaded customers not to withdraw cash.
The new measures introduced in the mainland will mainly target physical cash transactions via self-service dispensers that avoid monitoring, the report added, to maintain the health of China’s banking and economic system.
