Chinese police and finance authorities broke up 26 illegal banks in south China's Guangdong Province last month, a police officer said Tuesday.

The illegal banks were uncovered in a joint operation between the Shenzhen police, commercial banks and foreign exchange management authorities on April 22, during which 71 people allegedly involved in illegal money transactions were arrested, said He Zhaolang, deputy head of the economic crimes investigation section of the Shenzhen City Public Security Bureau, at a press conference.

He said the illegal operations involved 12.7 billion yuan (1.86 billion U.S. dollars).

Police also confiscated 8 million yuan in cash, more than 600 bank cards and 120 seals, and froze 371 bank accounts, he said.

The underground banks had set up offices in Hong Kong or Shenzhen, carrying out money laundering services and illegal foreign exchange deals, which had seriously disrupted China's finance and foreign exchange management systems and encouraged corruption, smuggling or drug trafficking, said He.

Police are continuing their investigations.

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