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Chinese Banks Probe Begins Disciplinary Action Over Fraud

The news from the banking regulator follows an announcement announcing a second round of repayment to depositors whose funds were frozen

Chinese police have arrested 234 people over a major banking scandal in Henan province, a local security bureau said on Tuesday.
Financial regulators in Henan had to deal with a financial crisis in mid-2022 that affected millions of customers. This shot from July 2022 shows people at a big protest in Zhengzhou over the freezing of their deposits by rural banks. File video screengrab: Reuters.


Investigations into protests by four Chinese banks’ customers unable to retrieve funds following suspected fraud has led to a disciplinary proceeding against a financial institutions inspector in Henan province.

The news from the China Banking and Insurance Regulatory Commission (CBIRC) follows an announcement from regulators announcing a second round of repayment to depositors whose funds were frozen.

The inspector is suspected of “serious disciplinary violations and is currently under disciplinary review” and has “accepted” the investigation, CBIRC said in a statement on its website, without detailing the suspected violations.

Some deposits at four lenders in Henan and one in Anhui province were frozen in what authorities said was a complex scam involving a private financial group that had stakes in the lenders.

The perpetrators had faked data by colluding with bank staff and siphoning off funds illegally, CBIRC said.

To revive depositors’ confidence in the sector, authorities in Henan and Anhui made repayments to smaller depositors starting July 15 following investigations and arrests.

In addition to the scandal, the central government is also grappling with a growing mortgage payment boycott across the country.


  • Reuters, with additional editing by George Russell



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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.


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