China's central bank has closed 60 illegal banks in Guangdong in the past 14 months. Zeng Qitong, chief of the information division at the People's Bank of China's Guangzhou branch, said the banks employed 250 people and had accumulated deposits of 59.3 million yuan (about HK$55.57 million). The banks offered deposit and foreign-exchange services at better rates than those available from state banks. They were fined a combined 18 million yuan. Most of the illegal banks were in the Pearl River Delta region and were usually run as any normal bank. Customers were allowed to buy yuan and foreign currencies. In Huizhou, police closed three such operations and arrested 17 suspects. They seized about 6.15 million yuan, US$10 million and HK$88.7 million, as well as two cars used to transport money and account records. Mr Zeng said: 'Our country imposes controls on the use of foreign exchange. 'But companies need more foreign exchange than they can obtain from official banks, so they go to these illegal banks, which offer better rates than state banks. 'Another important source of clients is people who are going abroad to gamble.' He said state banks could not sell foreign currency for betting purposes. The United States consulate in Guangzhou frequently receives visa applications from mainlanders who want to travel to Las Vegas to gamble. 'With their attractive rates, business has been good for underground banks,' Mr Zeng said. 'They are illegal and must be closed down and their managers punished by the courts.' But Mr Zeng said the central bank faced an uphill battle. 'Despite our best efforts, these banks will continue so long as there are foreign-exchange controls and they are profitable.'