Beijing, April 12

China will step up its crackdown on underground banks this year as the country’s economic slowdown and market volatility has sparked a wave of capital outflows, according to a senior official in the country’s foreign exchange regulator.

The State Administration of Foreign Exchange (SAFE) ‘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 one trillion yuan last year.