China will step up its crackdown on underground banks as the country's economic slowdown and market volatility sparks a wave of capital outflows, a senior official in the country's foreign exchange regulator says.
The State Administration of Foreign Exchange "will continue to work with the public security bureau and other departments to focus on cracking down on underground banks, to intimidate people who use underground banks, to block channels for underground bank transactions," Zhang Shenghui, head of SAFE's inspection division, was quoted as saying by the Economic Information Daily, a state-run newspaper.
Transactions by underground banks topped 1 trillion yuan ($A203 billion) in 2015 and police, the central bank and SAFE uncovered one case involving transactions totalling $US64 billion ($A84.54 billion).
Underground banking presents an increasingly complex threat to China's financial security, encompassing issues from financing for drugs and terrorism to tax fraud, the Ministry of Public Security said in 2015.
