China has battled to curb capital outflows for years. A move that took effect on Jan. 1 caps overseas withdrawals using domestic Chinese bank cards.

The gambling hub of Macau last year introduced facial recognition technology at ATMs to target illicit outflows from mainland China, a move that Hong Kong's central bank told Reuters could increase cash withdrawals in the financial centre.

The Hong Kong Monetary Authority (HKMA) declined to provide data on cash withdrawals at ATMs over the past three months but said monthly cash withdrawals using mainland bank cards ranged between HK$2 billion (£180 million) and HK$6 billion in 2017.

"The HKMA is aware of media reports about people using multiple mainland cards to withdraw cash at ATMs in Hong Kong," the central bank said in a statement, adding that it was "monitoring the situation and is in discussion with the banking industry and the police about this issue".

HKMA deputy Chief Executive Arthur Yuen shrugged off media reports that said up to HK$20 billion was being withdrawn from the city's ATMs each month.

"I have to clarify that we have never seen that number. We don't know where that number comes from. The number of monthly withdrawals, actually, is very volatile but it never reached that high a level," he said.

"The most important thing is banks need to monitor that (cash withdrawal). If they see any suspicious transaction ... they should and they have been reporting those kind of situations to the law enforcement agencies," he said.

Representatives of BOC Hong Kong Holdings (>> BOC Hong Kong (Holdings) Ltd), a unit of Bank of China Ltd (>> Bank of China Ltd), HSBC (>> HSBC Holdings) and Standard Chartered (>> Standard Chartered), which have large Hong Kong ATM networks, declined to comment on cash withdrawals.

A local banker said some commercial banks have stepped up monitoring of cash withdrawals.

At the start of 2018, about 90 percent, or 1,040, of Macau's ATMs had been fitted with "know your customer" (KYC) measures, including facial recognition technology.

HALTING 'IRREGULAR ACTIVITIES'

The Monetary Authority of Macau told Reuters that measures introduced at ATMs in the world's largest gambling hub had cut cash withdrawals to a "relatively reasonable level".

"Irregular activities have been stopped, promoting the security of the financial system of Macau and having a positive impact on the development of the local financial sector," it said.

The HKMA said it was "in close touch with the Macau authorities on their experiences in the use of facial recognition technology in ATM cash withdrawal", adding that there currently was no plan to introduce the technology in Hong Kong.

China's foreign exchange regulator, in its latest move on outflows, capped international withdrawals using domestic bank cards at 100,000 yuan (£11,179 pounds) a year and 10,000 yuan a day.

The HKMA said that rule could impact withdrawals in Hong Kong.

In recent weeks, Hong Kong media have reported several cases of mainland Chinese being robbed of hundreds of thousands of dollars after withdrawals using multiple ATM cards.

The HKMA said it was not against the law for a person to withdraw cash from ATMs on behalf of others, exposing a potential loophole that could make it hard for authorities to crack down on mass withdrawals.

Hong Kong police said they were working closely with the HKMA and banking industry to respond to any changes in financial crime trends.

(Additional reporting by Sumeet Chatterjee; Editing by Richard Borsuk)

By Anne Marie Roantree and Farah Master