China's central bank recently issued a new regulation covering personal bank accounts. According to the new regulation, an individual can only open one Type-I account with a particular bank. For those who already have a Type-I account with a bank, they can only open Type-II or Type-III accounts with that bank.

A Type-I bank account has all the functions of a bank account including allowing the holder to make payments, deposits, transfers and investments. There is no restriction on the amount that can be held in the account. However, a Type-I account has to be opened in person at a branch of the bank so the owner's identity can be confirmed face-to-face.

A Type-II bank account can be opened at a branch of the bank or via an electronic channel but it has limited functions. A Type-III bank account can be opened at a branch or via an electronic channel but it is for micro-payments including internet payments.

Officials of the People's Bank of China, or the central bank, said that the new regulation on individual bank accounts aims to establish a firewall to protect people from the risks associated with internet payments.

Individuals who have opened several bank accounts before the new regulation came into effect on Thursday are not affected by the new regulation and can keep using their cards.

Meanwhile, the announcement also requires each bank account to have a unique individual identification number and unique phone number, in order to prevent telecommunication fraud that rips off money from bank accounts linked with the same phone number.