Depositors from four rural banks in Henan have not been able to withdraw their money and check their accounts normally for more than a month. Relevant information shows that nearly 1 million depositors couldn’t withdraw tens of billions of deposits, involving several banks.

On May 20, the China Banking and Insurance Regulatory Commission (CBRC) held a briefing saying that it is paying close attention to the operation of small and medium-sized rural banks and urban commercial banks, and relevant departments have already launched an investigation.

According to CCTV Finance and other official media reports, on May 18, the CBRC informed that the bank’s major shareholder, Henan New Fortune Group, is suspected of breaking the law and committing crimes of absorbing public funds.

According to CCTV, six rural banks are involved: 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. Xuchang Rural Commercial Bank is the shareholder of five of the six banks.

On April 18, depositors of four banks in Henan suddenly found that they could not withdraw their money normally.

CCTV reported the case of Li from Suzhou, Jiangsu. She deposited 87,000 dollars in the Shangcai Huimin Rural Bank and Zhecheng Huanghuai Rural Bank in Henan. However, she hasn’t received her monthly allowance since April 18.
Yuzhou New Minsheng Village Bank and many other banks issued a “system upgrade maintenance,” saying that online banking and mobile banking apps would suspend services on April 18 and 19.

On April 25, the official website of the Xuchang Municipal Government replied that the system was being upgraded and optimized to block criminals’ fraudulent behavior.

Out-of-town depositors are reluctant

State-owned CCTV media announced that the four bank outlets’ access to money business is normal. However, the representative from Binhai Financial Assets Trading Center said that, in fact, foreigners are afraid of having the same troubles as the local people, and they are not able to make withdrawals.

He said that it wasn’t convenient for foreigners to have trouble during the epidemic.

According to Sina Finance, some users said that foreign accounts were still unable to withdraw funds from their Kaifeng New Oriental Rural Bank. Only local depositors could withdraw their funds.

However, the People’s Bank of China informed reporters that the Kaifeng New Oriental Rural Bank’s current system had been upgraded. Therefore, internet withdrawals were no longer possible.

Fraud and contact loss

Junzheng Zhida Technology stated in a letter to their superiors that the four rural banks forcibly shut down the online channel fund payment business on April 19. It resulted in large-scale complaints on the Internet platform.

The four banks had tens of billions of dollars in existing Internet deposits on their major Internet platforms with nearly one million customers.
According to Sina Finance, Yuzhou Municipal Government said that Yuzhou Xian Minsheng Village Bank had to upgrade and optimize the system to block fraud. They noted that deposits were protected by law and told depositors to wait.

Sina Finance added that a depositor asked a representative from Du Xiaoman whether they cooperated with Shangcai Huimin, Yuzhou Xinminsheng, and Zhecheng Huanghuai Rural banks. The representative confirmed the cooperation.
But, when the representative contacted the bank, he got the answer that the system had been upgraded.

Another representative from the third internet platform received an official letter that included the previous agreement but a message to ask for cooperation in providing a new agreement. He said that he couldn’t contact the person in charge.
In addition, Sina Finance informed that attempts to contact Yuzhou Xinminsheng Rural Bank and other village bank branches were unsuccessful. Public phone numbers were unable to reach.

Depositors forcibly arrested

The Chinese media outlet Da Yi Juan showed a video in which depositors traveled to the Zhengzhou provincial government and the CBRC to fight for their rights from May 18 to 21. They were asking the banks to repay them and ensure the safety of their deposits.

In a video, some depositors were forcibly arrested while others were pinned on the grounds. At the moment, a few of them have been released.

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