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China has taken steps to rein in the rapidly growing and lightly regulated market for online micro-lenders in the government's latest crackdown on Internet finance.

A top-level Chinese government body issued an urgent notice on Tuesday to provincial governments urging them to suspend regulatory approval for the setting up of new Internet micro-lenders, Reuters reported, citing sources who had seen the notice.

The multi-department body, tasked by the central government with reining in risks in the Internet finance sector, also told local regulators to restrict the granting of new approvals for micro-loan firms to conduct lending across regions, according to the sources.

The central government started a crackdown on the Internet finance sector last year, issuing guidelines and rules to regulate online financial activity following a spate of scandals, cases of fraud and high-profile peer-to-peer (P2P) failures.

The clean-up has led to the creation of a top-level administrative body comprising government entities that include the central bank and the banking regulator.

The crackdown on micro-lenders comes after authorities warned about rising household debt.

Unsecured consumer lending via Chinese online platforms more than tripled last year to almost $140 billion, according to a recent report by the Cambridge Centre for Alternative Finance.

Finance officers from a total of 17 provinces that allow micro P2P lending business, including South China's Guangdong Province, Southwest China's Chongqing Municipality and East China's Jiangxi Province, will attend a meeting organized by the People's Bank of China and China Banking Regulatory Commission to discuss the regulation of the industry, the 21st Century Business Herald reported on Wednesday.