BEIJING: Police in China’s Henan province possess arrested 234 suspects in connection with a rural banking scandal, the general public security bureau of the province’s Xuchang town said on Monday (Aug 29).
Deposits really worth at least US$1. 5 billion at a number of small lenders within Henan have been frozen since April in what authorities have mentioned was a complex scam that has sparked protests and renewed worries about the 4, 000 small banks working across China.
The scandal comes as China’s economy slowed sharply within the second quarter since widespread COVID-19 lockdowns hammered demand and business activity, while the property market has lurched from crisis to crisis.
The Xuchang general public security bureau mentioned in a statement the task of loss recovery has achieved substantial progress and the analysis was pushing forwards.
It mentioned a group of criminals illegally controlled four countryside banks including Yu Zhou Xin Min Sheng Village Bank, and they were thought of committing “a series of severe crimes”.
They attracted some depositors by having an annual return rate associated with 13 per cent to eighteen per cent, said the bureau, which is higher than levels within the wider market.
In a bid in order to shore up self-confidence in the banking program, Henan authorities began repaying depositors within the four rural banking institutions on Jul fifteen.
Financial government bodies in the province said they would on Wednesday launch another round of repayments to the banks’ customers.
Individuals with build up of between 400, 000 yuan (US$57, 818) and five hundred, 000 yuan will be repaid, the Henan branch of the The far east Banking and Insurance Regulatory Commission as well as the provincial financial agency said in a combined statement.
Following this round, the payments work by the govt would largely become completed, and further matters would be dealt with from the four banks, Henan financial regulators mentioned.