(Yicai Global) Nov. 5 -- The People's Bank of China is to set limits on large cash withdrawals in Hebei and Zhejiang provinces as well as the city of Shenzhen in a two-year pilot scheme aimed at curbing illegal financial transactions.

Non-cash payments have grown rapidly in recent years, but large cash transactions are also on the increase, the central bank said in a statement today. These sums can be involved in crimes such as corruption, tax evasion and money laundering.

The PBOC will set up a registration and analysis system for big cash withdrawals and deposits as well as oversee substantial cash transactions in different sectors in Hebei, Zhejiang and Shenzhen, it said.

Corporate bank clients in the three locations will need to apply to take out cash exceeding CNY500,000 (USD71,368), the statement said. The threshold for personal accounts has been set at CNY100,000 (USD14,275), CNY200,000 and CNY300,000 in Hebei, Shenzhen and Zhejiang respectively.

In the first stage, the emphasis will be on curbing the large cash-based business in Hebei province. That will encompass commercial banks, the real estate sector in Xingtai city and the medical field in Qinhuangdao city.

Once trials prove successful, the focus will shift to Zhejiang and Shenzhen. The PBOC will review the cash quota used in wholesale and retail sales, real estate transactions, car deals and construction in Zhejiang.

In Shenzhen, the central bank will examine large cash transactions from personal accounts, tighten the monitoring of substantial cross-border cash deals and the Chinese yuan cash business in Hong Kong.

Gradually, these regulations will be extended to different industries and regions. The PBOC will also pick suitable cities to implement a personal income reporting mechanism.