Cheques used by individuals or companies in the mainland will be allowed for payments across the country from the end of June, ending present restrictions that limit their use within a city.
National cheque settlements are to be introduced in June with a cheque scanning system implemented nationwide, Xinhua reported, citing People's Bank of China deputy governor Su Ning.
The system will allow banks to send an image of the cheque to the issuing bank to check the client's signature and to ensure the client has sufficient funds. It has been used in a pilot scheme for the past four months in Beijing, Tianjin, Shanghai, Guangdong, Hebei and Shenzhen to enable settlement across cities and provinces.
Stanley Wong Yuen-fai, a director and deputy general manager at ICBC (Asia), said the new measures would mark an important step for China to match the practice in most large countries such as the United States and Canada.
'It would be big improvement and would benefit businessmen and corporates the most. Individuals mainly use cash or credit cards to make payments, but business settlements in China still need to use cheques in many cases,' he said.
While China is catching up on international practice in cheque payments, the method has lost appeal in many other parts of the world as customers increasingly use credit cards, internet banking, telephone banking or other electronic payment systems.