Four rural banks in China freeze depositor funds, triggering months-long bank runs. It’s been happening since April. A steady stream of depositors across Henan, Dandong, and Shanghai have been lining up in front of the headquarters of four rural banks to demand their right to withdraw funds.
What’s going on? That’s the problem—based on customers’ social media posts, nobody seems to know. The speculations are all over the place. Some are worried that the banks are about to collapse. One customer thinks that the banks are creating a false sense of panic to withdraw so banks don’t have to pay interest. Others are more concerned that their withdrawals may be seen as acts of treason.
Why the paranoia? Depositors have begun staging (or attempting to stage) protests against the rural banks after the freeze. While the China Banking and Insurance Regulatory Commission claims to be looking into the matter, the Chinese government is using its pandemic health code app to track and control the movements of protesters, giving citizens green and red light codes to prevent people from gathering en masse to protest. Some app users claim that people suspected of being potential “dissidents” are being targeted and monitored on an individual basis by the app.
Our thought bubble: We’re seeing a series of potential bank failures compounded by the government’s abuse of a health app to control the movement of citizens. One netizen got it right, posting on social media that “People with money in the bank should give it as soon as possible to buy valuables to preserve their value. The bank storm will have a chain reaction. Dandong is just the beginning.. . Let’s see!” We can’t agree more with the notion that people ought to hedge their wealth to a reasonable degree. Nobody can fully see the tail risks lurking on the sides. But we know they’re there.
Recently, freezing depositors’ accounts by four rural banks in Henan has become a hot topic on social media. As a result, customers of these banks could not withdraw their money which led them to move to Zhengzhou, Henan to claim their rights. Following Henan, banks in Shanghai and Dandong (Liaoning) also witnessed a long traffic jam in front of their headquarters.
Depositors in Dandong, Liaoning Province, could not receive their deposits
Youtube channel Zai Ye Shuo posted a video stating that on June 17, many people lined up outside Dandong bank waiting to withdraw their money. The channel wrote, “Done! Bank can’t withdraw money! There was a run on a bank in Dandong, Liaoning, and a thunderstorm on the banks of Henan village caused panic.”
In the video, a long line of depositors can be seen outside Dandong bank, hoping to be able to withdraw their money.
Another video shows the traffic jam at Dandong Bank, Liaoning, on June 16.
Vision times quoted a witness as saying: “When I went to the Rural Commercial Bank, the rural merchants had no money, when I went to Dandong Bank, there were many people, I don’t know in the end whether they got the money or not.
Seeing so many people waiting to withdraw money, a man at the scene said: “It’s been like this these days, it’s like that every day.”
The incident that many depositors in Dandong City, Liaoning Province, could not withdraw their deposits sparked a wave of comments:
“Banking tricks, they purposely tell you to take out so they don’t have to pay interest.”
“Many banks in mainland China are about to collapse! They are closed.”
“The people’s sweat, tears, and riots, heaven will not forgive them.”
“Will future recipients be charged with plotting to overthrow the country?”
“It hurts to see such a great and weak country.”
“People with money in the bank should give it as soon as possible to buy valuables to preserve their value. The bank storm will have a chain reaction. Dandong is just the beginning.. . Let’s see!”
“Hell on earth, really pitiful”
“The party said to the commonwealth. Your money is the party’s money. The party’s money won’t be yours, how can the leeks be under the illusion that they still have their own money?”
“Give green code to savers, red code to withdrawers … Done.”
“Poor! I still haven’t received my money!”
Lining up in front of the banks in Dandong and Shanghai
Netizens Tweeted a video on June 17 stating that Shanghai Bank has a limit of 300 trading accounts per day, and many people are queuing in front of the bank.
A netizen who shared an image on June 15 showed that many older adults in Shanghai also had to queue to receive their pensions. However, many did not receive them because the bank only issued 100 serial numbers daily.
Another netizen shared a picture of an old man at 7:30 a.m. on June 15. The older man was standing in front of a bank in Shanghai and talking to himself. It was the seventh time the old man came to receive his pension after the pandemic. The older man ranked 117 and had to wait until the afternoon. He had fully prepared bread and water for himself. This is the current situation of the elderly in Shanghai.
Another video shows retirees lining up in front of the Shanghai Bank.
Sina Finance said that many people began to line up before 2 a.m. However, until 5 a.m., they still have not received the number to withdraw money.
A 78-year-old man went to a bank branch in Pudong New Area to receive his pension at 1:45 a.m. However, 10 people were already lined up at the door when he arrived at the scene.
He said, “The ATM next to the gate was broken, it swallowed an old man’s card, so people lined up at the business window.”
According to Jiefang Daily, citizen Qin Laobo said he went to the bank to withdraw money from his passbook a few days ago. However, the bank says it has stopped serving customers, or the number for the day has been exhausted.
At about 10 a.m. on June 14, a reporter from Jiefang Daily went to a bank branch at the intersection of Xiaomuqiao Road and Zhaojiabang Road. There was no line at the entrance to the bank, and two employees blocked reporters at the entrance. The reporter asked, “Can I go inside?” The staff pointed to the attached bill that said “Today’s queue number has been issued.” After a thorough investigation, the reporter learned that the bank’s counter is only open for two and a half hours in the morning and two and a half hours in the afternoon every day.
Originally published on The BL.