The People's Bank of China said on Monday it will "uphold innovation" while acting to limit risk in the Internet finance sector.

The central bank's comments followed speculation that moves to limit third-party transfers meant the government was tightening its grip on online finance.

"The central bank will remain committed to the perception, direction and policies of encouraging innovation in the industry, by closely studying the tasks laid out in the communique of the Third Plenary Session of the 18th Central Committee of the Communist Party of China and the latest government work report," the PBOC's online notice said.

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While spurring innovation, the central bank said it's equally important to protect consumer rights and control risks so that virtual finance serves the real economy.

Chinese regulators have imposed a series of policy constraints on leading Internet companies' financial moves, raising concerns that the government is acting to protect the mammoth State-owned financial institutions.

The State-owned banks imposed transaction ceilings on third-party payment tools, after a major leakage of bankcard information at an online travel agency raised concerns about online payment security.

Customers of the major banks won't be able to make instant transfers exceeding 5,000 yuan ($803) per transaction or 10,000 yuan via such channels as Alipay, the payment arm of e-commerce giant Alibaba Group Holding Ltd.

Citing security reasons, China Construction Bank Corp and Industrial and Commercial Bank of China Ltd have set a monthly transaction limit of 50,000 yuan, while Agricultural Bank of China Ltd and Bank of China imposed a ceiling at 200,000 yuan.

The moves were made after the central bank last week issued two drafts for consultation that would limit online shopping and money transfers for online payment service providers.

In response to the potential business setback, Alibaba Chairman Jack Ma said Alipay is "experiencing its toughest and proudest moment".

In fewer than eight months, Alibaba's money market fund Yu'ebao, which promises higher returns than bank deposits, has attracted 400 billion yuan in assets under management, chipping away at the huge deposit base that was once firmly held by banks.

"Who has empowered banks to dampen the rights of depositors to allocate their capital? And who can supervise the behavior of the 'Big Four' banks?" Ma asked in a post on the company's messaging app Laiwang on Saturday.

But the central bank said the drafts don't represent a consensus among financial regulators, payment providers and consumers. The proposals were prompted by concerns about money laundering, it said.

Regulators also put on hold plans by Alibaba and rival Tencent Holdings Ltd to offer virtual credit cards and barcode payments.

The central bank said the simplified approval process for virtual credit payments could threaten the real name system of financial transactions and enable money laundering.

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