Chinese regulators on Friday offered repayments to more rural bank customers whose withdrawals were frozen, in the ongoing saga of one of the country’s biggest banking scandals that sparked rare mass protests.
China’s rural banking sector has been hit hard by Beijing’s efforts to stem a housing bubble and rising debt, in a financial crackdown that has had far-reaching implications for the world’s second-largest economy.
Four banks in Henan province froze cash withdrawals in mid-April as regulators cracked down on mismanagement, locked out hundreds of thousands of customers from their funds and sparked sporadic protests.
The provincial banking regulator said in mid-July that individual customers with deposits of up to 50,000 yuan ($7,341) would have their money back after one of the biggest protests erupted in violence.
Since then, regulators have gradually offered repayments to more customers with higher quality deposits.
On Friday, the Henan Banking and Insurance Supervision Bureau pledged to repay those who deposited between 350,000 and 400,000 yuan ($51,300-58,600) and said in a statement that this group will receive them from August 22.
The statement added that “refunds from (deposit amounts) below 350,000 will continue to be paid,” suggesting that not all customers with smaller bank balances had received their funds yet.
Authorities have named the four banks and another rural bank in nearby Anhui Province as involved in a scheme to defraud investors and have launched a police investigation.
The Henan banking scandal has dealt an unprecedented blow to public confidence in China’s financial system due to the size and scale of the fraud, analysts say, with the banks involved said to have been operating illegally for more than a decade.
Chinese authorities are desperate to avoid disrupting social stability just months before a major congress of the ruling Communist Party.
A July 10 mass demonstration in Henan’s provincial capital, Zhengzhou, was violently crushed, with protesters being forced into buses and beaten by police, according to AFP eyewitness accounts and verified photos on social media.
#Chinese #banks #repaying #customers #protests
