Financial clients, transactions to face tougher due diligence

When individual cash transactions reach 50,000 yuan (US$7,841) or US$10,000, financial institutions including banks, fund managers and insurance companies will face more stringent regulations beginning in March, according to a recent statement from China's central bank.

The regulation, released by the People's Bank of China at the end of January, requires financial institutions to tighten due-diligence procedures on clients and transactions, especially overseas transactions.

Commercial banks, policy banks, securities firms, insurers, wealth managers and other licensed financial institutions must retain client information if any single transaction reaches 50,000 yuan or US$10,000.

Non-banking payment service providers must keep client information for individual transactions of more than 10,000 yuan or US$1,000.

The move comes as China enacts a three-year, anti-money-laundering action plan.

The central bank recently fined Alibaba-backed MYbank more than 22 million yuan due to serious violations related to anti-money-laundering policies.