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.
Twitter account @TragedyInChina shared a video showing scenes of residents chanting slogans, [quote] “Return my deposit! Return my deposit!” [end quote]
In the video, we can hear many people crying loudly. In another video of the same event, residents even kneel to protest.
Policemen arrested, beat, and pepper-sprayed depositors
He 他 claimed that when the police arrived, they beat and pepper-sprayed many of the depositors. The police also made several arrests.
As seen in a video, some depositors were cuffed to the ground, while others were forcibly arrested.
However, Cheng said that arrested protestors were later released. He added that about 200 people were at the scene on May 21.
Apollo News reported that residents launched a more extensive manifestation on May 23. Protestors chanted, “Henan has robbed money!” “We want to withdraw money!”
Authorities also dispatched a large number of undercovered police officers to control the situation. They beat and arrested the victims.
On May 25, a video showed a scene of a pepper-sprayed man. He couldn’t even open his eyes. We can hear two women talking in the video.
The woman recording the video asked the man, “You were pepper-sprayed, right?”
Another woman replied, “Oh, oh, yes, you film it and post it online.
Cheng added that residents were regular customers of the banks and that residents just wanted to save funds for their own, not for investment.
Thousands of depositors forcibly sent home
Regarding the manifestation on May 23, Apollo News cited news reporters at the scene and interviewed Wang, one of the depositors.
The police forced residents to delete photos and sign a guarantee form. According to Wang, the police forced some of the residents to return to their hometowns.
In addition, another friend sent a message that the police took the list of out-of-town guests from the hotel and started arresting people.
Moreover, a resident texted saying that the police besieged depositors on May 24 at the hotel where they stayed and asked for help.
So, are residents putting their faith in the right banking system?
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).
In March, Xuchang police issued a wanted notice and a 15,000 dollars reward for Sun Zhenfu, a former HXRC Bank vice president. He was suspected of serious economic crimes.
According to He relevant departments are abdicating their duties, and the bank is taking funds from its customers.
From the above events, we can see that residents are the victims in this situation. They demand protection for their rights.
A person told Apollo News that the situation was desperate. The police didn’t arrest people who ran away with money, but instead, they repressed the defenseless depositors.
He added that the bank and government credit system had collapsed.
Wang said it would be a disaster for families as no one had ever thought they wouldn’t be able to withdraw their savings and there is no income due to the pandemic impact.
According to Wang, depositors are in a completely hopeless state at the moment.
Depositors hope that the media can speak out.
The China Banking and Insurance Regulatory Commission and the People’s Bank of China issued new financial supervision regulations in January 2021, prohibiting banks from accepting deposits in multiple locations via the Internet.
According to Apollo News, depositors thought it would be safe to deposit their savings at banks as a consequence. Precisely, He felt that it was safe to deposit money into the bank’s self-operated platform as it was certified by Tencent.
He added the funds were depositors’ hard-earned money, and they trusted the government before making deposits in these banks. It’s too hard for them to take the blame.
He hopes that the media will help depositors speak out.
However, most media outlets are under the government’s control. Thus, whether depositors’ rights will be protected and the real situation exposed remains to be seen.