PBOC to enact anti-money-laundering regulations

That total represented about 2 per cent of the mainland's gross domestic product last year, according to state media reports. From next month, the bank will introduce a series of regulations to curb money laundering in financial institutions that will be the first of their kind on the mainland.

All financial institutions will be required to establish anti-money-laundering units and create databases of all account-holders and transactions. They will be required to cooperate with law enforcement departments and to keep confidential any anti-laundering information.

They must report any large transfers of funds, irrespective of denomination, as well as notify authorities of any single-day foreign currency transactions in excess of 100,000 US dollars (780,000 HK dollars) for individuals and 500,000 US dollars for companies.

They will also be required to report repeated foreign-currency lending by companies for investments in the mainland's B-share market. Banks must report to their parent bank as well as the People's Bank within 24 hours any single transfer involving more than 1m yuan between institutional accounts, and transfers of more than 200,000 yuan between personal accounts or between personal and institutional accounts.

They must also report any single cash transaction involving 200,000 yuan or more. Ba Shusong, an economic researcher at Peking University, said money laundering was being carried out at a rate of at least 200bn yuan a year through "underground financial institutions".

He said police, with the help of their overseas counterparts, were currently investigating more than 70 such cases involving more than 17 other countries. Jiang Tian, who is in charge of the anti-laundering committee of the Bank of China, said his bank was currently upgrading its computer network so that questionable transactions would be identified quickly.