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* Last week China suspended 3 foreign banks from forexbusiness
* Standard Chartered, Deutsche Bank hit by the ban -sources
* The ban extends until the end of March
* StanChart has asked China to shorten suspension -source
By Engen Than
SHANGHAI, Jan 6 (Reuters) - Standard Chartered isamong three lenders that China's central bank last weeksuspended from conducting some foreign exchange business untilthe end of March, two sources with direct knowledge told Reuterson Wednesday.
Reuters reported on Dec. 30 that China's central bank hadsuspended Deutsche Bank and two other lenders fromconducting some of their foreign exchange business, China'slatest bid to stem capital fleeing the country in the face of aweakening yuan.
The notices sent to banks did not give a reason for thesuspension, but the sources for that story said their banksmight have been targeted due to the large scale of theircross-border forex businesses.
One of the sources for the involvement of StandardChartered, which is currently in the middle of a globalrestructuring, said the bank has asked the People's Bank ofChina to shorten the suspension.
A spokesman for Standard Chartered declined to comment. Whencontacted by Reuters last week, Deutsche Bank declined tocomment.
China's central bank did not respond to requests forcomment.
Standard Chartered made $720 million from foreign exchangetrading globally in the first half of 2015, according to itshalf-year financial statement, equivalent to 8.5 percent of thelender's total operating income.
Chinese authorities are starting to police the nation'sforeign exchange market in a way currency traders have rarelyseen before, levying penalty payments for aggressive trading andprompting some banks to turn down business. (Additional reporting by Lawrence White in Hong Kong; Editingby Lisa Jucca and Will Waterman)
