China Central Bank Quietly Lowers US Dollar Withdrawal Limit
In an effort to tighten the country's capital controls in lieu of an increase in foreign currency withdrawals, China has now quietly reduced the amount of US dollars citizens are able to withdraw each day. China has been gradually increasing its scrutiny of US Dollar withdrawals given the volatile economic and political situation exacerbated by the ongoing US-China trade dispute.
The reduction of the allowable US dollar withdrawals was put on the spotlight following a viral video that was posted online. The video showed an irate bank customer who was demanding that she be allowed to withdraw US$200 from her dollar account.
The bank's cashier apparently refused to give the customer her money as she had apparently reached her limit.
The client argued with the cashier stating that she still had not gone beyond her limit as she had been tracking her withdrawals. When she forced the issue, the cashier offered to allow her to withdraw her US currency by converting it into Chinese yuan. The video, which was taken and uploaded by the angry client, was filmed inside an unidentified China Merchants Bank (CMB) branch.
Following the incident, it was later revealed that the woman was placed on a customer watch list for people who were making frequent US dollar withdrawals. Bank officials later disclosed that their employees were merely following a mandate given by the People's Bank of China (PBOC) pertaining to all US withdrawals. The woman was also later revealed to have withdrawn around US$49,800 from her US dollar bank account in the last eight months.
The country's central bank reportedly issued a new rule that effectively lowered the allowable daily US Dollar withdrawal amount from US$5,000 to US$3,000. The so-called "scrutiny benchmark" also involves a mandatory watch list for bank clients who frequently made US dollar withdrawals.
Prior to the implementation of the reduced limit, single transaction withdrawals of US$5,000 or more required clients to show proof of need. This includes purchased airline tickets for overseas travels or a health certificate for immediate medical expenses within the country or overseas. The quietly implemented change is apparently a new move to stem capital flight within the country.
The current rule for foreign currency withdrawals in the country still stands at US$50,000 per year, either through a single transaction or through installments. The State Administration of Foreign Exchanges also requires that banks ask for necessary identification and relevant documents for all clients that make deposits or withdrawals of US$10,000 or more.