Chinese authorities busted more than 40 major illegal private banks from July to November this year, the Ministry of Public Security (MPS) said Friday.
The illegal banks were uncovered in a five-month joint operation between the MPS, the People's Bank of China and the State Administration of Foreign Exchange, in eastern Fujian and Jiangxi provinces and southern Guangdong Province.
The ministry did not give an exact number of cases, but said the illegal operations involved 100 billion yuan (14.6 billion U.S. dollars).
According to the MPS, underground banks served as an important channel for money laundering and illegal foreign exchange deals. Such operations had "seriously disturbed China's domestic finance and foreign exchange market order."
The Ministry vowed to step up efforts in cracking down on illegal banking operations in the future and warned the public to keep away from such operations.
In December last year, the country proposed more severe punishments for illegal banking services in a draft amendment to the Criminal Law submitted to a bi-monthly session of the National People's Congress (NPC) Standing Committee, China's top legislature.
Authorities uncovered 42 cases of underground banking between Sept. 2007 and Sept. 2008, involving a total of 84.4 billion yuan ($12.3 billion).
(Xinhua News Agency January 9, 2009)
