Chinese police have busted underground banks that handled 200 billion yuan ($30.2 billion) in illegal money transfers this year, the Ministry of Public Security said on Wednesday.

Police said they arrested 450 suspects involved in 158 cases of underground banking and money laundering, according to the ministry's website.

Beijing has been fighting illegal cross-border outflows in an attempt to slow capital flight as the yuan currency weakened to near six-year lows.

A special task force, launched by the MPS, the central bank and the foreign exchange regulator, uncovered illicit banking services in 192 locations this year, the notice said.

On Wednesday, China state broadcaster CCTV reported that police in the southern city of Shenzhen recently busted an underground bank that handled 30 billion yuan in transactions over a six-year period.

Police arrested 26 major suspects in four different cities, the report said. The underground bank was disguised as a trade company.

"The key problem is that underground banks have become channels for drug dealers, smugglers and economic criminals to transfer funds," Shu Jianping, head of the anti-money laundering unit at the Ministry of Public Security, told CCTV.

Beijing started a campaign against illegal banking in April last year and uncovered more than 170 cases of money laundering and illegal fund transfers involving more than 800 billion yuan as of last November.

The crackdown included an investigation into the country's biggest underground banking case, which involves $64 billion of illegal transactions.

Although the crackdown has curbed underground banking to some extent, illegal activities using those "gray capital" networks are still spreading and becoming more elusive. Collusion between banks in different regions is rife, the notice said.

Underground banks are channels for transferring money obtained through illegal activity, including embezzlement of public funds by corrupt officials, an earlier Xinhua News Agency report on the crackdown said.

(China Daily 08/18/2016 page8)