Nearly a million Chinese customers unable to access their bank deposits: report

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Recently, there have been stern domestic issues with Chinese rural banks in which nearly a million depositors have struggled to withdraw their money for over a month in the Henan province. Relevant information shows that depositors couldn’t get back tens of billions of dollars from multiple institutions.

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$1.5bn from 1m customers locked after lenders operated outside their region

NORIYUKI DOI, Nikkei staff writer
May 28, 2022 01:32 JST

SHANGHAI — Protests have broken out in China after several regional banks prevented customers from making withdrawals in late April, stoking fears of a greater credit crisis without an intervention from financial authorities.

https://asia.nikkei.com/Business/Finance/Several-Chinese-local-banks-freeze-deposits-triggering-protests

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TheBL Staff 05/29/22, 09:20

Recently, there have been stern domestic issues with Chinese rural banks in which nearly a million depositors have struggled to withdraw their money for over a month in the Henan province. Relevant information shows that depositors couldn’t get back tens of billions of dollars from multiple institutions.

Meanwhile, authorities claim they found illegal wealth collecting activities involving a major shareholder and a third-party platform.

This incident sparked anger among residents and led to the recent protest as they believe authorities are not safeguarding their rights.

Six banks are involved in this case, including Yuzhou Xinminsheng Village Bank, Kaifeng Village Bank, New Oriental Rural Bank, Xinhuaihe Rural Bank in Bengbu City, Xinhuaihe Rural Bank in Yixian City, and Shangcai Huimin Village Bank.

Let’s take the typical stories of some of the bank customers.

The first case is Li from Suzhou, Jiangsu. According to CCTV, Li deposited 87,000 dollars in the Shangcai Huimin Rural Bank and Zhecheng Huanghuai Rural Bank in Henan on April 18 and 19. However, she hasn’t received her monthly allowance since then.

On April 25, several banks, including Yuzhou New Minsheng Village Bank, announced a “system upgrade maintenance” that would affect the online app and mobile banking services.

In another case, Bai deposited her savings of around 119,000 dollars in Yuzhou Xinminsheng Village Bank, Henan Shangcai Huimin Village Bank, and Henan Tuocheng Huanghuai Village Bank in Henan, with the promise of higher interest from these institutions.

For a month, Bai has not been able to withdraw her funds. Instead, she received a message saying the bank system was under maintenance.

Earlier in March, Reuters reported the cases of Jerry Chang and Tony Qian, who couldn’t access about 890,000 dollars and around 3 million dollars, respectively.

Both incidents occurred at Yuzhou Xinminsheng Village Bank.

Jerry Chang said that she made the deposit because of a high-interest rate offer of 1.85%.

Chinese language media Da Ji Yuan interviewed Cheng 程 and He 他, two local depositors.

Cheng said that the banks promoted online savings accounts and offered a higher interest rate based on national standards. His bank account shows regular interest payments, but he cannot withdraw any money. He opened an account in person at the local bank but explained that most people open their accounts online. He added that people were to feel safekeeping their money in a bank.

Meanwhile, He who opened her account three years ago via a third-party platform felt scammed. Since April 18, she has not been able to do transactions.
She said, “It’s my personal savings account, but now I have become an illegal investor, and I can’t access my account.”

The financial freeze from banks has sparked anger and protests

Both Cheng and He confirmed the residents’ protest from May 18 to May 21 in front of the provincial Banking and Insurance Regulatory Commission office. Residents were asking for repayment and demanded that the Commission protect their deposits’ safety.
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According to Chinese media outlet Da Ji Yuan, the Henan rural banks involved in the incident were branches of the Henan Xuchang Rural Commercial Bank (HXRC Bank).

https://m.thebl.com/china/nearly-1-million-chinese-customers-unable-to-access-their-bank-deposits-report.html

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