Core Viewpoint - The People's Bank of China, along with the National Financial Regulatory Administration and the China Securities Regulatory Commission, has issued a new regulation on customer due diligence and transaction record management, effective from January 1, 2026, which simplifies the process for low-risk transactions while enhancing scrutiny for high-risk cases [1][5]. Group 1: Regulation Overview - The new regulation cancels the previous requirement for customers to register the source of funds for cash withdrawals exceeding 50,000 yuan, aligning with the earlier draft [1]. - Financial institutions are now required to conduct customer due diligence based on risk levels, allowing for a more tailored approach rather than a blanket inquiry for all customers [3][5]. Group 2: Risk-Based Approach - Banks will implement enhanced investigations for transactions deemed high-risk, while simplifying procedures for low-risk customers, such as those with consistent income sources [3][4]. - For example, a customer with a stable pension income will only need to verify their identity without further questioning about the funds' purpose [3]. Group 3: Transaction Monitoring - The regulation emphasizes the importance of maintaining accurate and complete records of customer identities and transaction histories to facilitate monitoring and investigation of suspicious activities [5]. - Financial institutions must balance the need for anti-money laundering measures with the optimization of financial services, ensuring that their actions are proportionate to the assessed risk [5].

Core Viewpoint - The People's Bank of China has released new regulations emphasizing risk-based customer due diligence for financial institutions, balancing anti-money laundering measures with optimized financial services [1] Group 1: Regulatory Changes - The new regulation cancels the previous requirement for individuals to register the source of funds for cash withdrawals exceeding 50,000 yuan [1] - Banks will no longer uniformly question all customers during withdrawals; instead, they will assess the risk level to determine the necessity of further inquiries [1] Group 2: Risk Management - In cases of high money laundering risk, banks are required to enhance their investigation into the source and purpose of funds [1] - For low-risk situations, simplified measures will be implemented to streamline the process [1]