Key Takeaways:
- Chinese protestors clashed with the police in the city of Zhengzhou in Henan province.
- The agitators were protesting against the local banks who have frozen $1.5 billion in customer savings
- Henan New Fortune Group, a large shareholder in the four banks in question, stands accused of illegal activities
YEREVAN (CoinChapter.com) — A large crowd of citizens clashed with the police as they held a protest in front of the Bank of China, demanding to unfreeze their accounts. The unrest took place in the Chinese city of Zhengzhou in Henan province. The angry bank depositors were livid that they could not access their savings held in their accounts.
Several protestors were injured in the clashes, while the law enforcement authorities detained many more in dozens of buses. According to local media reports, as many as 1,000 people participated in the demonstration.
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Why are Chinese citizens storming the bank?
At least four rural banks in Henan and Anhui provinces froze millions of dollars worth of bank deposits in April on the pretext of an internal system upgrade.
However, as the weeks turned into months, customers discovered the banks had permanently locked them out of their savings. The banks also failed to provide any further clarification on the matter.
In April, Sanlian Life week, a Beijing-based magazine, estimated that as many as 400,000 customers could not access their bank accounts.
Local media outlets believe the frozen deposits could be worth as much as $1.5 billion.
Thousands of affected depositors have organized demonstrations against the banks, all to no avail. The series of protests come amid continued movement restrictions set in place due to the Covid 19 outbreak.
“We came today and wanted to get our savings back. I have elderly people and children at home, and the inability to withdraw savings has seriously affected my life,”
AP News quoted one woman protestor from Shandong province saying.
To gain the support of the Central Government against local Henan authorities, the protestors waved Chinese flags as a sign of their patriotism.
They also held placards and banners against the banks and Henan provincial administration.
“Against the corruption and violence of the Henan government,”
one English banner read.
According to several pictures on Twitter, protestors also painted a large portrait of former president Mao Zedong (Chair Mao) at the bank entrance.
Mao was the founder of the People’s Republic of China and the chairman of the Chinese Communist Party for 25 years.
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Chinese authorities investigating the matter
The Chinese authorities are investigating Henan New Fortune Group, a large shareholder in the four banks. According to reports, the company used the banks to attract large deposits by offering higher interest rates.
Banking rules in China allow local banks to obtain deposits from their customers. However, according to the national banking regulator, the banks used third-party platforms to raise funds from people outside their jurisdictions illegally.
“Henan New Fortune Group has illegally absorbed the public’s funds through internal and external collusion,… the use of third-party platforms, and fund brokers,”
the China Banking and Insurance Regulatory Commission told state-run Xinhua News Agency in May.
Henan New Fortune Group has since shut down its website. Its executives, who are wanted for financial crimes, are also absconding.
According to CNN, the Henan banking regulator has also issued a statement, claiming that relevant departments have ramped up efforts to find solutions.
“(Authorities) are coming up with a plan to deal with the issue, which will be announced in the near future,”
the statement said.
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Protest against the Chinese banks turns violent
Several videos and photographs on Twitter show the protestors turned violent, mostly instigated by law enforcement authorities.
Besides uniformed officers, the local government also deployed officers in civilian clothes to confuse the protestors.
In the videos mentioned above, protestors throw plastic bottles at the officers.
In another tweet, officers drag protestors mercilessly down the stairs as they demand their life savings.
“They did not say they would beat us if we refused to leave. They just used the loudspeaker to say that we were breaking the law by petitioning. That’s ridiculous. It’s the banks that are breaking the law,”
a protestor named Zhang told Reuters.
As the news agency reported, Zhang cannot access about 170,000 yuan or $25,000 of his savings in the Zhecheng Huanghuai Community Bank.
The banking crisis impacts thousands of businesspeople, pensioners, and young professionals. Moreover, it has once again exposed the flows in the banking system, which can deprive citizens of their savings overnight.
