(Bloomberg) -- China imposed a program to keep large transactions in check amid heightened concerns over the state of its financial system as bad debt balloons in the wake of the coronavirus outbreak.

The People’s Bank of China this month kicked off a pilot plan in Hebei province that would require retail and business clients to pre-report any large withdrawals or deposits, according to a statement. The two-year program will be expanded to Zhejiang and Shenzhen in October, encompassing more than 70 million people.

Chinese lenders are facing a surge in bad debt with the economy set to expand at the slowest pace in four decades. Authorities stepped in last month to halt banks runs at two local lenders in Hebei and Shanxi. That comes on top of an already shaky situation last year, which saw China bail out and seize several struggling banks.

The pilot program aims to tighten monitoring of “unreasonable demands of large amounts of cash” to keep systematic risks in check, the PBOC said in the statement. Regulators will protect the public’s normal need for large transactions, it said.

The plan will require businesses to provide information on transactions exceeding 500,000 yuan ($71,000). For individuals, the threshold spans from 100,000 yuan to 300,000 yuan depending on the region, according to the statement.

While the statement didn’t say banks can reject a transaction exceeding the amount, lenders will need submit reports, mark risks and follow up on customers that come from high-risk sectors or those make frequent transactions or deviate from past behavior.

Authorities are seeking to shore up their $41 trillion banking system, which could suffer an 8 trillion yuan increase in bad debt this year, according to S&P Global. Small Chinese banks tracked by UBS Group AG need an estimated $349 billion of fresh capital.

At the same time, regulators are asking banks to forgo profits and provide cheap loans to help support the economy, adding further strain on the system.

©2020 Bloomberg L.P.