Recently, the People's Bank of China, the State Administration of Financial Supervision and Administration, and the China Securities Regulatory Commission jointly issued the Administrative Measures for Due Diligence of Customers of Financial Institutions and the Preservation of Customer Identity Data and Transaction Records (Draft for Comments) (hereinafter referred to as the Administrative Measures) to solicit public opinions. The draft for soliciting opinions has been open to the public since August 4th, and the deadline is September 3rd. The most notable of these is the cancellation of the mandatory requirement in the 2022 version of the regulatory rules for individuals to understand and register the source or purpose of funds for a single cash deposit or withdrawal transaction of over 50000 yuan in the "Management Measures". This is a moderate relaxation measure. In the requirements for 2022, it is specified that when depositing or withdrawing cash of over 50000 yuan, it is necessary to "understand and register the source or purpose of the funds". However, the implementation intensity and methods of this policy vary depending on the regulations of each bank, which also makes the concept of "understanding" full of variables: it can be a literal inquiry, or it may evolve into multiple procedures, making depositors (including some bank tellers) annoyed. In 2023, there were media reports that a man in Ningbo, Zhejiang Province withdrew 25000 yuan from a transaction. When bank staff routinely asked about the purpose of the withdrawal, the man became impatient and said he wanted to withdraw the money in batches, with one yuan at a time. Finally, the man saw the staff crying in frustration and withdrew 25000 yuan. It can be seen that some banks are increasing their measures, inquiring about "benchmarks" that are even lower than the prescribed 50000 yuan, causing impatience among depositors and great injustice among tellers. The reason for introducing the regulation of "inquiring about the source and purpose" is based on the requirements of anti fraud and anti money laundering. This reason is valid, as there may indeed be related illegal and criminal activities involved in large deposits and withdrawals. For example, in April of this year, there were also media reports that a woman in Anyang, Henan withdrew 200000 yuan but could not explain the purpose of the withdrawal, which alerted bank tellers and ultimately led to a telecommunications fraud. The statement 'inquiries can prevent fraud and money laundering' is valid, while the statement 'frequent inquiries can affect normal withdrawals' also exists. Under these two objectives, financial institutions must make a trade-off. And the wording change of this new regulation is obviously clear. Restrictions cannot be abandoned for fear of choking, but must ensure smooth economic activity order. And the new regulations do not mean a relaxation of anti fraud and anti money laundering requirements. The new regulations require financial institutions to adopt strengthened due diligence measures for situations with high money laundering risks, which means the need to use more precise and technical solutions to prevent related issues. Of course, there is still room for exploration on how to achieve this, and it is worth observing how many precise measures financial institutions have to achieve 'silent supervision'. This kind of loosening is necessary, not only to facilitate normal economic behavior, but also to strengthen people's confidence in financial institutions. It can be imagined that if people lack stable expectations for the use of their savings and feel inconvenient in the use of their assets, this is likely to shake their judgment on the stability of financial services. This situation can also lead to changes in behavioral patterns, such as a tendency to bypass financial institutions in daily life, use cash, purchase precious metals and other equivalents, which objectively affects the flow of funds in the financial system. In short, regulatory actions should balance various demands as much as possible to ensure smooth blood circulation in social operation, and on this basis, make precise regulations on illegal activities. (New Society)