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Customers of Chinese banks to get their deposits back after protests

By on July 12, 2022 0

TAIPEI, Taiwan (AP) — Financial regulators in central China’s Henan and Anhui provinces have promised to return some bank customers some of their deposits after a protest against their frozen accounts Sunday turned violent.

In statements released late Monday, officials said customers with deposits of 50,000 yuan (about $7,400) or less would be refunded. They said others with larger bank balances would get their money back at a later, unspecified date.

The banking protests have drawn attention as angry depositors who tried to travel to Zhengzhou in Henan to try to get their money back from the six financially troubled rural banks were stopped from traveling by a health app on their cellphone. On Sunday, they staged their biggest protest yet, which plainclothes police and security forcefully dispersed.

The protesters are among thousands of customers who opened accounts at banks in Henan and neighboring Anhui province that offered relatively high interest rates. They later found they could not make withdrawals after media reports that the head of the banks’ parent company was wanted for financial crimes.

The regulators’ announcement was met with skepticism by customers who have been staging online and offline protests since April in an attempt to get their money back.

“It doesn’t really solve the problem,” said Xu Zhihao, a bank customer who did not attend the protest on Sunday.

The People’s Bank of China, the country’s central bank, guarantees customer deposits up to 500,000 yuan ($74,000), but that won’t be enough to cover some people’s losses.

One protester, who gave only her surname, Ding, said she and her mother had 800,000 yuan ($119,000) in savings deposits at several banks.

“They made this announcement because we put our lives on the line. These less than 50,000 yuan are not due to us. It’s more of a payment to maintain social stability,” said Ding, who declined to give her full name for fear of reprisals. She said she and her husband were beaten by plainclothes security guards during a a demonstration on Sunday, during which several people were injured.

Several protesters told the AP that some people were hospitalized after being injured when plainclothes police and security guards used force to disperse protesters, though most injuries were scrapes or cuts. .

Bank customers have opened their accounts online through financial platforms such as JD Digits, which is owned by e-commerce giant, lured by offers of higher interest rates, such as fixed deposit accounts of five years paying an interest rate slightly above 4%.

When they realized they could not withdraw their money, they tried to contact the banks, the local Banking and Insurance Regulatory Commission and the central bank.

When that failed, they decided to protest outside the provincial headquarters of the China Banking and Insurance Regulatory Commission in Henan’s capital, Zhengzhou. Sunday’s protest was the largest yet, drawing hundreds of people.

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