It's not the consumer-friendly online reform many were expecting. Just recently China has revealed online banking rules that have come down heavily on the side of consumer protection - and established banks.

The People's Bank of China (PBOC), the central bank, and the China Banking Regulatory Commission (CBRC), the banking sector regulator, have issued a document outlining new online banking regulations that essentially limit the amount of money consumers can transfer to third-party online payment platforms. The document was drawn up April 3, but only revealed late last week.

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PBOC and CBRC ordered all banks to be prepared to implement the new transaction limits by June 30. Banks must also establish a means to confirm the identities of their consumers when they link third-party payment platforms to their bank accounts.

"The requirements governing the establishment of business relations between commercial banks and third-party payment institutions are aimed at strengthening management of such business," the regulators said in the document.

Regulators said the new rules "protect the safety of commercial bank clients' information, funds and bank accounts and maintain the clients' legitimate rights."

Under the new rules, Chinese banks will limit how much money an individual can transfer to platforms, such as Alipay, per transaction, or on a single day based on the person's financial status. Alipay is a third-party online payment platform that has no transaction fees. It is run by Alibaba Group Holdings Ltd, China's largest internet company.

Currently, commercial banks such as the Industrial and Commercial Bank of China Ltd (the world's largest bank) limit transfers to Alipay to 50,000 Yuan monthly.

Analysts said ICBC wants to prevent depositors fleeing the bank to invest in high-yielding money-market funds such as Yu'e Bao, Alibaba's popular online money market fund that pays an annual interest of 6% compared to the 0.35% paid by most commercial banks.

Chinese media said the document issued by both institutions does not limit individual transfers to 5,000 Yuan or a monthly total of 10,000 Yuan as had been widely feared and reported in Chinese media.

The huge popularity of online funds has ignited a war between banks and Internet companies aggressively providing financial services such as wealth management products and online payments.