100000 yuan annual cap on overseas UnionPay withdrawals

China’s State Administration of Foreign Exchange has slapped an annual cap on overseas cash withdrawals for UnionPay cardholders at 100,000 yuan (US$15,713) or its equivalent per card, effective next year.

The move coincided with recent steps by China to stem capital outflows.

The new rule, issued by the country’s foreign exchange regulator, also put a cap of 50,000 yuan for overseas cash withdrawals for single card user from October 1 to the year-end, the sources told Reuters.

Chinese law prohibits individuals from transferring more than $50,000 out of the country per year, but overseas cash withdrawals via bank cards provided a regulatory loophole.

UnionPay customers are also bound by an existing daily withdrawal limit of 10,000 yuan per card.

The announcement by SAFE confirmed an earlier Reuters report. The restrictions are aimed at “further enhancing the work on anti-money laundering and the prevention of financial risks”, CNR cited UnionPay as saying.

The capital outflow is linked to the Chinese stock market plunging 40 percent since the middle of June and the People’s Bank of China’s 4.4 percent yuan devaluation in August.

China’s foreign-exchange reserves plunged by a record $94 billion last month, according to the country’s central bank, leaving it with a war chest of $3.6 trillion.