China Arrests 800 In Crackdown On Underground Banking

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Beijing: China’s policy ministry says 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.

The ministry said more than 380 underground banks that handled transactions totalling more than 900 billion yuan ($130 billion) were broken up in the crackdown launched in 2016.

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

Expectations that 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.

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