October 11, 2016 / 11:02 AM / a year ago

China's Guangdong province busts underground banks that handled $35 bln- Xinhua

BEIJING, Oct 11 (Reuters) - Police in China’s southern province of Guangdong have busted underground banks that handled 230 billion yuan ($34.49 billion) in illegal money transfers this year, state news agency Xinhua reported on Tuesday.

Police arrested 350 people suspected to be involved in 140 cases of underground banking and money laundering, Xinhua said, citing the Guangdong provincial public security department.

Illegal banking has been rampant in some parts of the province such as the capital Shenzhen, where an underground bank that handled 30 billion yuan in transactions was busted in August.

The story also cited a bust by Shenzhen police this month, where 10 suspects illegally moved 48 billion yuan ($7.20 billion) out of the mainland from 2014-2015 by establishing fake trading companies in Shenzhen and neighbouring Hong Kong.

China has vowed to fight illegal cross-border outflows in an attempt to slow capital flight as its yuan currency weakens to six-year lows.

The Ministry of Public Security (MPS) said in August that a special task force launched by the MPS, the central bank and the foreign exchange regulator have busted underground banks that handled 200 billion yuan ($30.2 billion) in illegal money transfers this year.

Officials from the Guangdong provincial public security department said the police would keep cracking down on underground banking to ensure order in the financial system, Xinhua said. ($1 = 6.6685 Chinese yuan renminbi) (Reporting by Yawen Chen and Nicholas Heath)

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