Sources familiar with the situation said that the banks sent a notification to the North's embassy in Beijing and its consulate general in Shenyang.

They said it demanded the bank accounts of all North Koreans, including diplomats, be emptied by the end of August.

Since then, financial transactions involving North Koreans are said to have almost ceased.

The sources added that North Koreans in principle aren't allowed to open new accounts.
It is rare for the Chinese banks to take such strict measures on North Korean diplomats, as even under UN sanctions each is allowed to open one account.

In June, the US government unilaterally punished a bank in Dandong, Liaoning Province, for allegedly facilitating the transfer of money for companies involved in the North's missile development.

The latest move is seen as China's attempt to show that it's taking a tougher line on the North.

However, it remains to be seen how much impact the measures would have on Pyongyang.

Many North Korean merchants in China are said to be doing business in cash or using the accounts of Chinese trading partners.