China's central bank governor said more time is needed to investigate alleged money laundering by Bank of China Ltd.

"The news came out yesterday, and there's not enough time (to figure out what happened). The priority at the moment is to find out what's going on," said Zhou Xiaochuan, governor of the People's Bank of China, at a media briefing on the sidelines of the sixth round of the China-US Strategic and Economic Dialogue on Thursday in Beijing.

In a 20-minute broadcast on Wednesday, China Central Television alleged that Bank of China had violated rules on transferring money overseas that leaves money-laundering loopholes.

The PBOC and the State Administration of Foreign Exchange are investigating the report, two government officials familiar with the matter told Bloomberg News on Thursday.

The unidentified officials said the probe is focusing on whether Bank of China violated rules in its operations or aided money laundering, but starting an investigation does not mean the bank has done anything wrong, Bloomberg reported.

Neither government agency responded to China Daily's interview requests. A press officer for the bank gave no comment on questions concerning the investigation.

According to 21cbh, a business news website, BOC branches in Guangzhou and Zhuhai have suspended the service, with no reopening date given.

Bank of China has been offering a cross-border yuan transfer service called Youhuitong since 2011 through its outlets in Guangdong province as well as overseas branches. The service helps clients convert unlimited amounts of yuan into other currencies and transfer those funds abroad, CCTV reported.

In an official statement on Wednesday, the bank denied the service is used for laundering money. Instead, it said the service allows money to be moved for emigration and overseas property investment purposes.

"References to an 'underground bank' and 'money laundering' (in the report) are inconsistent with the facts," the statement said.

It also said the bank has already reported its cross-border yuan transfer service to the nation's banking regulator and has carried out the service according to regulatory principles and anti-money-laundering rules.

Chinese foreign-exchange rules cap the maximum amount of yuan that individuals are allowed to convert into other currencies at $50,000 per year and ban them from transferring yuan abroad directly.

Wan Li, a banking sector analyst with BOCOM International Holdings Co Ltd, said in a research note: "Considering that the 'Big Four' State-owned banks have a steady operation style, there's an almost zero possibility that Bank of China openly uses its branches for money laundering. But we cannot exclude the possibility that some bank clerks at the branches may help clients forge documents to prove their money comes from legal sources."

The bank's short-term stock price is likely to fluctuate before investigators unearth the truth, said Wan, but analysts at BOCOM International are still encouraging investors to buy BOC stocks for the long term, as they believe the incident will not affect the bank's overall operations.

Youhuitong, a pilot program for cross-border yuan transfer, allows Chinese residents to send their money to Bank of China's overseas branches, convert the money into whatever foreign currency they want, and transfer it to 28 countries and regions around the world, according to the BOCOM International note.

The Chinese authorities launched a trial in Guangdong province in the second half of 2012, allowing individuals to transfer yuan abroad as part of efforts to promote global use of the currency. It designated Bank of China, China CITIC Bank Corp and a foreign lender to provide such services.

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