The State Administration of Foreign Exchange has set a deadline for remaining accounts to be closed before December 1 and has ordered banks to stop servicing those accounts after the deadline, the Financial News said on Thursday.

In January 1994, China allowed local companies to make foreign exchange settlements through the banking system, selling foreign exchange earnings to state banks and buying foreign exchange once they had authorisation.

That replaced a system whereby exporters had a special account under which they were given a quota for foreign exchange based on their foreign currency earnings. After the reform was implemented, new quota accounts could not be opened and old accounts were to be phased out. During the phasing out period, payments could be made from thoseaccounts but no new deposits were allowed.

Banking sources said many such accounts still existed though the amount of foreign exchange affected was limited. However, they said the directive was part of a campaign to gain greater control over the nation's foreign exchange.