Stock markets around the world are pounding bank stocks on concern their basic business is under threat. There's an added concern about banks in China: how the stock-market falls may be exposing fraud in their operations.

Bank stocks are under pressure world-wide over investor concerns that their profit margins are at risk as more central banks move toward negative short-term interest rates. U.S. banks got hit anew after U.S. Federal Reserve Board Chairman Janet Yellen said negative short-term rates should be considered.

In China, while negative interest rates don’t appear to be on the central bank’s near-term agenda, banks’ profit margins are being pressured as the interest rates have gotten cut and bad debts rise. Yet, another factor lurks in the background for China’s banks: fraud of the kind that results from banks’ lax internal controls that floats to the surface when stock markets tank – as China’s has.

Two major banks in recent weeks have said they are cooperating with police about massive scams that appear to share characteristics.

In late January, Agricultural Bank of China Ltd. described a “material risk incident” at its Beijing branch involving tradable notes worth 3.915 billion yuan, around $595 million.