Chinese regulators have promised to repay more victims of one of the country's biggest-ever banking scandals, after hundreds of thousands of customers were left without access to funds, triggering rare mass protests.

China's rural banking sector has been hit hard by Beijing's efforts to rein in a property bubble and spiralling debt, in a financial crackdown that rattled the world's second-largest economy.

Four banks in Henan province froze cash withdrawals in mid-April as regulators scrutinised alleged mismanagement, leaving billions of yuan in savings locked up and sparking sporadic demonstrations.

Authorities later named those firms and another rural bank in nearby Anhui province as involved in a scheme to defraud investors -- and promised victims would start to get their money back.

"Henan New Fortune Group manipulated five village banks in Henan and Anhui to illegally absorb and occupy public funds ... and covered up illegal activities," an unnamed China Banking and Insurance Regulatory Commission representative told state media Sunday, citing a three-month initial police investigation.

"The next stage will be to begin advance payment work for customers with over 50,000 yuan (deposited)."

The Henan banking scandal has dealt an unprecedented blow to public confidence in China's financial system owing to the size and scale of the fraud, analysts say, with the banks involved allegedly operating illegally for more than a decade,

Chinese authorities are desperate to avoid disruptions to social stability just months away from a major congress of the ruling Communist Party.

A July 10 mass demonstration in Henan's provincial capital Zhengzhou was violently quashed, with demonstrators forced onto buses by police and beaten, according to eyewitness accounts given to AFP and verified photos on social media.

Shortly afterwards, Henan's provincial banking regulator said customers with deposits of less than 50,000 yuan ($7,500) would be repaid starting Friday.

But in one WeChat group containing hundreds of depositors, only a handful reported successfully receiving their funds back, according to messages seen by AFP.

A few customers reported receiving their deposits Friday, while others complained that the designated mobile app had bugs and would not let them register, according to local media.

The funds being repaid came from some of the seized assets of Henan New Fortune Group, the company accused by police of manipulating the banks, state broadcaster CCTV reported last week.

Regulators have said depositors will be paid in batches, but did not announce a specific timeframe for the repayment of accounts with more than 50,000 yuan in funds.

Related Links
Global Trade News

Tweet

Thanks for being here; We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceDaily Contributor $5 Billed Once credit card or paypal		SpaceDaily Monthly Supporter $5 Billed Monthly paypal only

China growth falls to two-year low on Covid, property woes
Beijing (AFP) July 15, 2022
China logged its slowest economic growth since the initial Covid outbreak Friday, expanding just 0.4 percent in the second quarter with lockdowns and property market weakness pushing the government's target further out of reach. Beijing has dug its heels in on a zero-Covid policy of stamping out virus clusters with snap lockdowns and long quarantines, but this has battered businesses and kept consumers jittery. The slowdown comes after China's biggest city Shanghai was sealed off for two months ... read more