Six people have been arrested in Shenzhen, south China, for running a large underground banking operation, according to the State Administration of Foreign Exchange (SAFE).

Preliminary investigations have revealed that the underground bank was well-organized and had been providing illegal financial services for more than seven years. Around 4.2 million yuan in 55 related bank accounts has been frozen.

The illegal transaction volume in the Shenzhen-based office of the illegal bank stood at 4.3 billion yuan last year. The aggregate business turnover of the three bank accounts controlled by the underground money center amounted to 1.78 billion yuan from the beginning of 2006 to July 25 this year, including 970 million yuan in revenue and 810 million yuan in expenditure.

Most of the illegal transactions were connected with export, oil sale, home buying, land rights transfers and securities investment. Its clients spread throughout the Chinese mainland, with the key clients coming from the coastal Guangdong, Jiangsu and Zhejiang provinces, said the SAFE.

The clients even included some renowned large state-owned enterprises, SAFE added.

Figures from SAFE showed that more than 70 underground banks and illegal foreign exchange swap centers were exposed in 2006.

The administration investigated 1,914 cases and imposed fines totaling 139 million yuan during last year's overhaul on forex-related services.

In recent years, China has endeavored to fight financial and drug-related crimes as illegal money transactions have been on the rise. The central bank set up an anti-money laundering bureau in 2003 and a monitoring and analysis center in 2004.

The nation's anti-money laundering law came into effect on Jan.1 this year. An identification system had been set up linking all the nation's banks, making it easier for the bank officials and police to check a customer's identity. (One U.S. dollar equals to 7.57 yuan)