China is tightening the screw on money laundering by requiring its financial bodies to report any large or suspicious transactions.

According to new rules released by the People's Bank of China on Tuesday, financial institutions such as banks and insurers will be required to report large and suspect transactions to anti-money laundering authorities.

The new rules, which come into effect next March, came on the heels of the country's first anti-money laundering law, which was passed last month and is effective in January.

The new rules set out specific definitions of large and suspect transactions that must be reported to the Anti-Money Laundering Monitoring and Analysis Centre, an office under the central bank.

A single transaction exceeding 200,000 yuan (US$25,400) or a transaction with accumulated value of 200,000 yuan within a day are defined as large transactions.

For foreign currency, the sum is US$10,000.

As for suspicious transactions, securities dealers, futures brokers and fund management companies should report if they notice idle accounts being suddenly reactivated and large transactions taking place over a short period, Xinhua News Agency reported.

Also, commercial banks, credit unions, postal savings institutions and trust companies have also been warned to look out for sudden closure of accounts following large transfers, loans paid back ahead of schedule and transactions that do not tally with clients' financial status.

The detailed rules, experts and industry players said, will make the anti-money laundering efforts more effective, although it could increase costs for financial bodies.

"Being more specific will enable financial institutions to better deal with anti-money laundering tasks," said Qiu Zhaoxiang, professor at the Institute of Finance Studies at University of International Business and Economics.

Some have voiced concerns over the costs involved.

"The (transaction) sum may be too small, which may increase our reporting workload," said an official from a leading private bank in the country who wished to remain anonymous.

But Qiu said the definition of a large transaction is in line with China's conditions, citing the example of United States where any transaction larger than US$10,000 is required to be reported to the relevant authority.

"Although the rules will make it hard and complex to launder money, it will also increase the workload for financial institutions," Qiu said.

But he said financial institutions are also public institutions, which means it is their public duty to fight money laundering.

"It is obvious that it will mean extra operating costs for us, but it is manageable," said a manager from a fund company who also requested anonymity.

The rules also require financial institutions to set up specialized anti-money laundering posts and designate staff to handle the job.

The central bank said it could adjust the definition of the large transaction if needed.