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China has no plans to issue bank notes with a face value of 500 yuan (62.5 U.S. dollars), the People's Bank of China said.

A central bank statement quashed wide-spread on-line reports that 500-yuan notes were in the works. Some rumour mongers even showed pictures of the fake bank note.

"The rumors could affect the normal circulation of the RMB, China's currency, and jeopardize the financial order. This is vile behavior," the PBoC said, while pledging to launch an investigation with the public security departments and industry and commerce regulators.

The PBoC also called on the public to stay on guard. The largest denomination bank note for the Chinese currency is 100 yuan.

Many financial analysts say issuing a 500-yuan note might trigger inflationary fears.

Official figures show the consumer price index, China's leading inflation index, climbed only by 1.2 percent in the first quarter of the year. The broad money supply surged by 18.8 percent in the first quarter over the same period last year, according to central bank figures.