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800 held in China after crackdown on underground banks in 2016


Added on 27/02/2017

Beijing: Over 800 people have been detained in China last year for their alleged involvement in illegal banking activities to the tune of 900 billion yuan (USD 131 billion), officials said on Sunday, reports Deccan Chronicle.

The suspects were involved in 380 major cases related to underground banks, unapproved financial institutions commonly used for money laundering.

The cases related to transactions worth about 900 billion yuan (USD 131 billion) in underground banks in 2016, the Ministry of Public Security (MPS) said.

A campaign against underground banks to maintain financial order and security is helping the country's anti-corruption drive recover the assets of fugitive officials, the ministry said.

In 2016, the ministry worked with the central bank and the State Administration of Foreign Exchange to crackdown on the transfer of illicit money via offshore companies and underground banks.

Officials with the MPS said the ministry will continue action against illegal private banks in cooperation with the central bank and the foreign exchanges regulator in 2017, state-run Xinhua news agency reported.

"For a long time, underground banks have become a fast channel to transfer money, for they are anonymous and hidden. Many criminals have taken advantage of the channel to transfer their illegal gains to the overseas," Zhang Niannian, an official with the central bank said.

Underground banks have also offered a quick passageway for corrupt officials to transfer their properties, Zhang said.

The central bank will track and analyse new methods of crimes especially in special non-financial institutions and sector and improve measures of anti-money laundering, Zhang said.

Shu Jianping, head of the anti-money laundering office of the economic crime investigation division of the MPS, said cases related to underground banks covered several industries, including foreign trade and real estates.

"Harms of underground banks are increasing," Shu said, adding that local public security organs were urged to continue the campaign against underground bank.