Chinese police on Friday cracked down on the country's largest underground bank in Zhejiang province as part of an ongoing probe into rogue financial institutions.

The Ministry of Public Security said that the bank had handled transactions worth $64 billion before police shut it down.

Like Us on Facebook

Also on Thursday, police in Guangdong Province said they had discovered 10 unapproved banks responsible for almost 51.6 billion yuan in illegal transactions, earlier this month.

In December 2014, arrest warrants were issued for 56 suspects and at least 3,000 bank accounts were frozen.

Police said one leader of the network in Zhejiang was Zhao Mouyi, who transferred more than 100 billion yuan abroad using 850 different bank accounts and a dozen Hong Kong front companies, Xinhua reported.

The report said that up to 410 billion yuan in foreign exchange transactions were made by the unnamed illegal organisation.

According to International Business Times, due to a weakening economy and a perception that investments are safer outside the country, many Chinese people are trying to move their money offshore. This has resulted in many underground operations that enable currency exchange and the transfer of funds higher than the permissible limits set by Beijing.

While there is no official data on the size of China's underground banking business, the ongoing crackdown has revealed unapproved fund transfers worth more than $177.4 billion and 170 cases of money laundering since April, the People 's Daily reported on Friday.

A gang leader referred to as Yang told Xinhua that a number customers wanted to avoid the strict supervision on foreign exchange trade in China. The gang reportedly earned over 50,000 yuan daily thanks to this.

The latest case shows attempts by China's foreign exchange regulators and the central bank to crack down on unapproved international transactions in order to keep the supply of money stable and lower domestic interest rates to spur growth. 

Ten unapproved banks in southern China's Guangdong province responsible for 51.6 billion yuan in unlawful transactions were raided by regulators on Thursday, the People's Daily said.

TagsChina Financial Crackdown, Zhejiang province, Underground banks, Guangdong Province, Zhao Mouyi, China's foreign exchange regulator, China'scentral bank