Smaller banks in China are in trouble as they are accused of crimes, bad debts and excessive risk, due to Xi Jinping’s failed zero Covid policy. Peter, a depositor, who had placed his savings of around $6 million in accounts at three small banks in China’s Henan province, said he had not been able to access them since April, CNN reported.
“I’m about to have a nervous breakdown. I can’t sleep,” CNN Business quoted Peter as reporting. Besides Peter, thousands of depositors have fought to get their savings back from at least six banks located in rural provinces in central China.
Last year, China Bohai Bank, a national joint-stock commercial bank, was accused of secretly using a customer’s $438 million in deposits as collateral. The charges come from the company “Jiangxi Jemincare Group Co”, which informed that its deposits at Bohai Bank were secretly used as collateral by the bank for a petrochemical company in Nanjing, local media reported.
According to media reports, four banks in Henan suspended cash withdrawals in April this year. Local banks in China are only allowed to take deposits from their original customer base, but authorities said “third-party platforms” were used to acquire funds from depositors outside the region.
The national banking regulator has accused a majority shareholder of the four banks of illegally drawing money from savers. “Henan New Fortune Group, shareholder of the four village banks, illegally absorbed public funds through internal and external collusion, use of third-party platforms and fund brokers,” the China Banking Regulatory Commission said. and insurance at the state agency. Xinhua News Agency in May.
Runs on smaller Chinese banks have become more frequent in recent years, and some have been accused of financial irregularities or corruption, CNN reported. Experts have expressed concern that the biggest financial problem may be looming, caused by the fallout from a real estate crash and soaring bad debts related to the COVID-19 pandemic.
At least 400,000 bank customers across China have been unable to access their savings, according to an April estimate from Sanlian Lifeweek, a public magazine cited by CNN. (ANI)
(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)