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Tuesday, August 25, 2015, 09:37

China cracks down on underground banks

By Xinhua

BEIJING - Chinese police have launched a nationwide campaign against underground banks to maintain order in the financial and capital market, police said Monday.

Meng Qingfeng, Vice-Minister for public security, urged police to be wary of the dangers underground banks pose to national economic security and the order of the financial market.

A similar campaign was launched in April by the Ministry of Public Security (MPS), the central bank and the State Administration of Foreign Exchanges to stop transfers of illicit money through offshore companies and underground banks.

The campaign uncovered several major lapses involving more than 430 billion yuan (US$67.2 billion), Meng said.

Meng said underground banks were still rampant and becoming a channel for non-economic offenders to transfer their illicit assets, pointing out that they disturbed the financial and capital markets.

Meng urged police around the country to better coordinate with the central bank and the foreign exchanges regulator while conducting the campaign, which will run from now through the end of November.

The police will also strengthen publicity to raise social awareness of the harm of underground banks.

In another policy initiative, Chinese lawmakers on Monday began debating a draft law requiring independence of asset evaluation industry associations from government regulators.

The draft law, submitted for its third reading at the bimonthly session of the Standing Committee of the National People' s Congress (NPC), said regulators should not have personnel or financial connections with industry associations, nor can they feed asset appraising agencies with business orders.

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