China’s Regional Authorities Set to Accelerate Payments to Bank Run-Affected Depositors

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Authorities in Henan province have announced a third round of payments for depositors affected by a bank run scandal involving a slew of rural lenders.

On 29 July the Henan province banking regulator and its financial department made a third public announcement in relation to advance repayments for depositors at four village county banks, including:

  • Yuzhou Xin Mingsheng Village County Bank (禹州新民生村镇银行),
  • Shangcai Huimin Village County Bank (上蔡惠民村镇银行),
  • Zhecheng Huanghuai Village County Bank (柘城黄淮村镇银行), and
  • Kaifeng XindongfangVilalge County Bank (开封新东方村镇银行).

According to the announcement payments will be made to off-balance sheet institutional and individual clients with total sums of between 100,000 to 150,000 yuan starting from 1 August.

On the same date banking and finance authorities in the Anhui province city of Bengbu announced that payments would be made to clients of Guzheng Xinhuaihe Village County Bank (固镇新淮河村镇银行) with total sums of 100,000 to 150,000 yuan, also starting from 1 August.

Zeng Gang (曾刚), chair of the Shanghai Finance and Development Laboratory, said to state-owned media that full advance payments are an “innovative disposal method,” that full abides by the principle of protecting regular, small-scale bank customers.

“Related disposal work is a gradual process, and following further in-depth development, the subsequent schedule is expected to accelerate,” Zeng said.

The announcements arrive after Henan province authorities announced on 25 July that payments would be made to institutional and retail clients with sums of 100,000 yuan.

“Looking at things overall, from the initial sums of less than 50,000 yuan, to 100,000 – 150,000 at present, indicates that related disposal work is geared towards its final disposal direction, and in the process of orderly progress,” Zeng said.