China to repay customers hit by bank scam that sparked protests

Regulator says customers at five rural banks whose funds have been frozen since April will get their money back from Friday.

Henan protests
Chinese authorities have announced they will repay customers hit by a bank scam that sparked rare protests in the country [File: Reuters]

Chinese authorities have promised to repay bank customers victimised by a financial scandal that has sparked rare public protests in central China.

Customers at five rural banks in Henan and Anhui provinces whose funds have been frozen since April will get their money back, the national banking regulator said in a statement on Monday.

Clients with deposits of up to 50,000 yuan ($7,442) will be repaid starting on Friday, the China Banking and Insurance Regulatory Commission said, with arrangements for repaying other customers to be announced separately.

Fundings involved in “illegal or criminal” activity will initially not be repaid, the regulator said.

The announcement comes after police on Sunday said they arrested a number of suspects alleged to have taken control of several banks through a group company and made illicit transfers through fictitious loans.

The banking scandal, which is believed to be one of China’s biggest ever financial scams, has sparked a series of protests in recent months that authorities have met with force.

On Sunday, an estimated 1,000 depositors gathered outside People’s Bank of China in the city of Zhengzhou to demand their money back, following similar demonstrations in May and June.

Videos circulating online showed demonstrators being beaten and dragged by unidentified men dressed in white.

Some protesters have accused local police and officials of colluding with the banks, including by using the country’s COVID health pass to restrict them from public places.

In June, authorities in Zhengzhou punished five officials for changing the health codes of more than 1,300 customers to prevent them from using public transport and entering public spaces.

Public protests are relatively rare in China, where dissent is tightly controlled by the ruling Communist Party.

Aggrieved citizens are, nonetheless, sometimes able to organise large demonstrations, risking arrest and prosecution in the country’s opaque judicial system, which activists say lacks independence from Beijing.

Source: News Agencies