AgBank is the first major state bank to make a public statement against cryptocurrencies after China's State Council, or cabinet, last month vowed to crack down on bitcoin trading and mining activities.
Following a recent meeting with the People's Bank of China (PBOC), Agbank said it would conduct due diligence on clients to root out illegal activities involving cryptomining and cryptocurrency transactions.
If a client is found to be involved crypto trading, its account would be immediately shut, and relationship cut, the lender said in the statement.
Bitcoin's bull run globally had revived speculative trading in China, where people buy cryptocurrencies using yuan via bank accounts or payment platforms. Last month, three industry bodies issued a ban on crypto-related financial services.
AgBank also cautioned clients against crypto fraud, and asked them to report illegal activities, according to the statement, which was later deleted from the bank's website.
As China ramped up its campaign against cryptocurrencies in recent weeks, bans on cryptomining have been issued in major bitcoin mining hubs, including Sichuan, Xinjiang, and Inner Mongolia.
China has also blocked a slew of cryptocurrency-related social media accounts, and barred the search for major cryptocurrency exchanges such as Binance and Huobi on baidu.com and Twitter-like platform Weibo.
(Reporting by Samuel Shen and Andrew Galbraith; Editing by Simon Cameron-Moore)