China’s central bank has said it is postponing implementation of new rules that strengthen scrutiny of cash withdrawals and deposits due to “technical reasons”. The new regulation, which was said to target money laundering and originally expected to take effect on March 1, requires people who make a single cash deposit or withdrawal that exceeds 50,000 yuan (US$7,8884), or US$10,000 in a foreign currency, to report the source and intended use of the money. Banks and other licensed financial institutions handling relevant transactions must also validate and store client’s information, according to the joint order issued by the People’s Bank of China (PBOC), the China Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission last month. But the PBOC issued a notice on Monday saying the new rules would be delayed and transactions would continue under current protocols, which only require banks to check a person’s identification. “After the promulgation of the regulation, some small and medium-sized financial institutions raised that it puts forward specific standards and requirements on a variety of financial products and business models, and financial institutions need to revise and improve their internal management systems, information systems, business processes, and conduct personnel training,” the statement said. Earlier this month, the PBOC said the new regulation would not affect the normal cash deposit and withdrawal needs of individuals, and the main purpose was to curb illegal activities such as money laundering in compliance with international standards. China has recently cracked down on illicit financial activities such as telephone scams, illegal fundraising and cross-border gambling . In the first 11 months last year, the police handled more than 370,000 telecoms fraud cases, according to the Ministry of Public Security. Despite reassurances from the central bank, the relatively low cap for mandatory disclosure has sparked public controversy over the potential for surveillance overreach. Casinos going online to bypass China’s anti-gambling laws on authority’s radar Experts say the regulation will effectively infringe on individual property rights by giving financial institutions the power to restrict deposits and withdrawals at their discretion. It may also mute capital flows and impede China’s economic recovery, analysts have argued. Lu Liangbiao, a Beijing-based senior partner at law firm Dentons, said the new regulation would mostly affect innocent individuals, even though it was designed to prevent money laundering. “The so-called corruptive and money laundering activities in any society are rare. [We] cannot assume that everyone is a suspect just because there is a possibility,” he said in a post online on Tuesday. The latest statement from the PBOC said it will continue to guide financial institutions in strengthening anti-money laundering capabilities, enhance the effectiveness of financial services to help the real economy – especially small and medium-sized enterprises –while preventing financial risks.