China’s New Tiered Bank Accounts and their Impact

In 2017, new bank account regulation was introduced limiting each individual to 3 different types of debit accounts. The purpose of these new regulations is to put a restraint on Money Laundering and prevent telecommunication fraud. While this new regulation will affect people’s lives, it also puts the banks in a position of opportunity where they are able to adapt to the change and use it to their advantage.

A new bank regulation was introduced in 2017 to assist with the overuse of debit accounts in China. This regulation would also go on to reduce the commonly recognised crimes of Money Laundering and Telecommunication Fraud. The C392 allows each individual to have 3 types of debit accounts, each for their own purposes:

• Type 1: Aims to meet general needs, includes being able to deposit and withdraw cash, in addition to transferring large amounts.
• Type 2: Aims to be used for daily consumption and online transactions, it includes online accounting and has a limited transfer/payment amount.
• Type 3: Aimed at small payment amounts, it’s used for online and mobile payments to a limited amount.

The restrictions of each of the account types can offer opportunities to banks by allowing them to establish a client base online and further develop their business. This has been done by including numerous incentives such as coupons or cash discounts for clients to sign up their Type 1 account with apps that allow a “Quick Pay” option with their Type 2 account. 

The ‘Bank Account Type’ report looks to further explore the impact that the different types of accounts has on individuals and their lifestyle, as well as how it really helps prevent crime in order to benefit society. 

Clients of Kapronasia’s Asia Financial Advisory Service can download this report. For more information on this report or any other of our reports, please email us research@kapronasia.com.