China: In Henan, bank depositors stage mass protest, demand frozen millions of their life's savings back

Beijing: In China, bank customers have been carrying out massive street protest in the city of Zhengzhou in Henan province after a large number accounts have been sealed up, seized and funds frozen. The financial situation has arisen due to liquidity crunch, which is apparently prevailing for about two months now.

Congregating in large number, bank depositors in Henan province staged their largest protest against the "corruption and violence of Henan government." The agitators demanded their savings back from the bank that have frozen their deposits since mid-April this year.

Why bank depositors in China are protesting?

Four rural banks in China's central Henan province, since April, have frozen millions of dollars worth of deposits. This has been threatening the livelihoods of thousands of customers in an economy that has been largely affected by the COVID-19 pandemic and the subsequent lockdowns.

The protests, which has recently gained steam, have been continuing for the past two months. Agitated depositors have staged several demonstrations in Zhengzhou, the provincial capital of Henan, but their demands have fallen on deaf ears.

Sunday (10 July) witnessed more than thousand depositors from across the Asian nation congregating outside the Zhengzhou branch of the China's central bank, the People's Bank of China, to launch their largest protest yet.

Notably, the demonstration is among the largest that China has witnessed since the COVID pandemic.

In June, Zhengzhou authorities had resorted to tampering with the country's digital COVID health-code system to prohibit the movements of depositors and thwart their planned protest, leading to a nationwide outcry.

This is huge. Don't know how this will end. Henan bank is NOT the only one that is having problems with liquidity. All four Chinese banks are having the same issue. Some depositors found they can save and can NOT withdraw money with their bank cards. #bankrun #China #CCP pic.twitter.com/5WYYgpmIWP

— Jennifer Zeng 曾錚 (@jenniferatntd) July 10, 2022

Videos that have been doing rounds on social media showed protesting bank depositors raising slogans and waving banners denouncing "the corruption and violence of the Henan government". Some even held national flags to display patriotism is a common strategy for protesters in the country where dissent is suppressed with vigour.

Images also showed protesters throwing plastic bottles at approaching security guards who then roughly dragged some of them away.

Deposits frozen by banks in China

According to reports in Chinese media, the frozen deposits could be worth up to 1.5 billion dollars. Meanwhile, the authorities claim that they are investigating three of the four banks.

The banks which started freezing millions of dollars worth of deposits in April, told the customers back then that they were upgrading their internal systems.

Also, none of the banks responded to emails and telephone calls seeking comment.

Which banks in China have frozen deposits?

According to a report by Asia Markets, six banks across the Henan and Anhui provinces have effectively frozen deposits. They are:

- Yuzhou Xinminsheng Village Bank (located in Xuchang City, Henan Province)

- Zhecheng Huanghuai Bank (City of Shangqui, Henan Province)

- Shangcai Huimin Rural Bank (Zhumadian City, Henan Province)

- New Oriental Village Bank (City of Kaifeng, Henan Province)

- Huaihe River Village Bank (Bengbu City, Anhui Province)

- Yixian County Village Bank (Huangshan City, Anhui Province).

However, the protests have now moved to People’s Bank of China (PBOC) branches across the region, including in Zhengzhou.

Impact of protests on Xi Jinping's government

The protest by bank depositors comes at a politically sensitive time for the ruling Communist Party. Within just few months, President Xi Jinping is expected to seek an unprecedented third term at a key meeting this fall.

Demonstrations over lost savings and affected livelihoods may lead to political embarrassment for Jinping.

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