Saturday 29 April 2017

China arrests 800 in crackdown on underground banking

Beijing has tightened foreign exchange controls
Beijing has tightened foreign exchange controls

More than 800 people have been arrested in a crackdown on unlicensed banking operations as authorities try to stem outflows of money from the country, China's policy ministry says.

The ministry said more than 380 underground banks that handled transactions totalling more than 900 billion yuan (£105 billion) were broken up in the crackdown launched last year.

Communist leaders allow informal finance to support entrepreneurs but try to stop activity they say threatens the state-run banking system, supports crime or helps people violate foreign exchange controls or other regulations.

Expectations the currency would decline in value prompted companies and small investors to move money out of China starting in late 2015. That prompted Beijing to tighten foreign exchange controls.

AP

Press Association

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