Recently, China-local banks’ freeze of 1.5 billion deposits has sparked outrage.
According to the South China Morning Post, the amount of frozen money has yet to be confirmed. Still, depositors have formed groups on social media to express their grievances, alleging the figure totals tens of billions of yuan.
According to Liberty Times Net, since April 18, 4 deposits at Yuzhou Xin Minsheng Village, Shangcai Huimin County, Zhecheng Huanghuai Community, and Kaifeng New Oriental Village have been frozen, sparking several protests in Zhengzhou, the capital of Henan.
The outlet stated that the scams are related to third-party Internet finance platforms such as Du Xiaoman, where deposits are transferred mainly online to non-bank account platforms for profit.
Depositors mistakenly believe these financial commodities are deposits, similar to China’s previous stormy P2P.
The banks then denied any connection to the third-party deposits scam.
However, Liberty Times Net cited insider sources that the root cause of the problem is bank executives and stockholders. They worked together to construct a fictitious system that worked around the China Banking and Insurance Regulatory Commission’s requirements. Third-party Internet financial platforms, such as Du Xiaoman, can help with these online financial transactions. The platform earns money by moving payments to non-bank accounts, which are the shareholder accounts instead of the banks.
The SCMP interviewed a victim from Liaoning province, who identified herself as Hang and said that she and her parents had deposited 128,000 dollars in three of the banks involved. Still, now they cannot receive the money and are desperate.
A depositor named Li, who took part in the protest, had more than 100,000 dollars in savings. He claimed that Du Xiaoman Finance assured him that his money would be safe, but he was taken aback when the bank informed him that his money was not a bank deposit.
Chinese police are currently halting the protest, using force if needed and requesting that people erase their cellphone video data and images.