Banking News
- Underground bank cracked down
Date: 7-Aug-2007 Sources: (Xinhua Online)
CHINESE authorities have broken up an underground bank that did business in every one of the country's provinces, providing illegal funding for everything from stock market investments to property.
The country has been stepping up its efforts to crack down on illicit lending and to prevent speculative foreign capital from pumping up the country's share and real estate prices.
The State Administration of Foreign Exchange (SAFE) said that it and Shenzhen police had caught the head of the bank and five other suspects in a recent sting operation.
The bank, which had been in business for seven to eight years, was most active in Shenzhen and Guangdong Province, as well as the coastal manufacturing centers of Jiangsu and Zhejiang, the currency regulator said on its Web site yesterday. In Shenzhen alone, the bank logged 4.3 billion yuan in transactions from the beginning of 2006 to May of this year, it said. The bank's clients included well-known State-owned firms, the SAFE said. They used the funds to pay for fuel, cover deposits for land-use fees, invest in shares and pay export-related fees, the SAFE said.
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