South Korean financial authorities are inspecting the local branches of three Chinese banks and Barclays, and two people familiar with the situation said the probe revolves around a surge in yuan-denominated deposits in the country.

The Bank of Korea and the Financial Supervisory Service began a two-week inspection of the units of Bank of China Ltd., Industrial and Commercial Bank of China Ltd. and China Construction Bank Corp. on March 17, Lee Jong-uk, an FSS director in charge of the investigation, said Wednesday.