CHINESE investigators are looking into the activities of staff at three state banks after they uncovered “illegal abuse” of $36.3 billion (£20.9 billion) of government funds so far this year.

An estimated 22,000 Chinese officials have already been audited in the investigation, with 196 referred to the Communist Party for scrutiny and possible punishment.

The inquiry, which is to be carried out through the Audit Office, will focus on the branches of the Bank of China, Bank of Communications and China Merchants Bank. The investigation comes just ahead of plans by the Chinese Government to list the shares of the Bank of China on the Hong Kong Stock Exchange.

The Bank of Communications, the country’s fifth-biggest lender, issued new quoted shares in June.

Separately, the China Banking Regulatory Commission said that standard checks this year had uncovered irregularities involving $73 billion in loans and other funds at the nation’s Big Four state lending banks.

The commission said: “The checks found that rules are still being violated at the four banks and the accuracy of loan classification at some branches needs improvements. Some bank branches continue to breach government rules, despite the investigation.”

About 800 officials have been punished.

The move comes only a day after the authorities said that they would no longer give aid to banks that had moved into the private sector.

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