China to cap overseas withdrawals using domestic bank cards

China's foreign exchange regulator plans to cap overseas withdrawals using domestic Chinese bank cards at 100,000 yuan ($15,370) per year in what it says an effort to target money laundering, terrorist financing and tax evasion.

Individuals who exceed the annual quota will not be allowed to undertake overseas transactions for the remainder of the year and the following year, the State Administration of Foreign Exchange (SAFE) said in a notice posted on its website.

The regulator has advised  banks to adopt the guidelines from 1 April.

China's foreign exchange regulatory agency, which functions as a bureau under the government, is primarily responsible for drafting policies and regulations related to foreign reserves and foreign exchange, supervising and inspecting forex transactions, and managing China's forex and gold reserves and foreign currency assets.

SAFE's mandate includes the study and implementation of policy measures for the gradual advancement of the convertibility of the renminbi, China's official currency. The significance of an adjustment in the renminbi's value to the global economy, along with China's huge forex reserves, has made SAFE an increasingly important player in international forex and financial markets.

SAFE operated as an independent entity until 1998, when the Chinese government brought it under the control of the People's Bank of China (PBOC). The rationale for this move was to strengthen the PBOC as a central bank.