Standard Chartered is believed to be among the three lenders that were suspended from conducting foreign exchange business until the end of March by the People's Bank of China (PBoC) at the end of 2015.
The London-listed bank, along with German lender Deutsche Bank and another bank were suspended by China's central bank late in December, although no explanation for the decision was offered, it has been reported.
According to sources familiar with the matter cited by Reuters, liquidation of spot positions for clients and a range of activities related to cross-border, onshore and offshore businesses are all covered by the suspension.
The PBoC has reportedly warned the banks that, should they engage in lucrative foreign exchange business by taking advantage of the different exchange rates, it would move to implement further bans.
With the Chinese yuan suffering from ongoing weakness after it was devalued in August 2015, Beijing authorities have been trying to halt the flow of money out of the country, as the gap between the onshore and offshore market for the Chinese currency has widened.
Among the range of measures implemented to stem the outflow of funds, Chinese authorities have introduced severe fines for aggressive trading.
That, in turn, has driven a number of lenders to turn down business in the country, which is facing its slowest growth in a quarter of a century.
In the first six months of 2015, Standard Chartered, which is primarily focused on Asian markets and is undergoing a major restructuring operation, said it made $720m (£492m, €670m) from its foreign exchange operations worldwide, a figure that represented 8.5% of its total operating income in the period.
The PBoC has taken the decision to suspend the banks because of the scale of their foreign exchange trading businesses, say sources. They added Standard Chartered has contacted China's central bank in a bid to have the suspension shortened.