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China: Video of tanks on the streets go viral amid protests by people demanding their money blocked in a massive bank scam

Thousands of depositors are protesting in China for months demanding their money back, which have been blocked by several rural banks after they lost money in a massive bank scam

Battle tanks arrived on the streets of Rizhao in Shandong Province, reportedly to scare away protestors amid a massive bank scam. Videos that have emerged on social media show tanks rolling up in the streets, with hundreds of onlookers on the side of the street. Dozens of tanks are seen in the video, which have been shared on social media claiming that the tanks are crushing the protests.

The tanks line up on the road, apparently preventing people to go to the branch of Henan Bank on the opposite side. After the scam in several rural banks was exposed, the banks have frozen deposits, preventing depositors from withdrawing their funds, which have triggered massive protests.

For weeks now, thousands of people are holding protests demanding their deposits back. However, as the Chinese govt is known to be not tolerant of protests, they have deployed heavily armed forces to stop the protests, even though the protests are against banks and not against the government. And now, as per claims, tanks are being deployed.

However, some others claiming that the tanks were on the roads for a routine movement, and not related to the protests. Reportedly, there is a navy training base nearby, and such movement of tanks happen every year. Apparently, the people lining up the streets were there to take photos of the tanks, and they are not protesters.

The protests and the crackdown

It is notable that the tanks were seen in Rizhao in Shandong Province, while the protests are going in the nearby Henan province. However, whatever be the reason of the tanks, it is true that the depositors are actually facing harassment and intimidation for staging protests, apart from not getting their own money. Reportedly, the police and authorities asking people not to participate in protests, even threatening that they will lose their jobs if they show up in demonstrations.

Cops are calling people to warn against joining protests, harassing families, and even going to schools to tell the kids to ask their parents to back off from demonstrations.

The scam

The scam was exposed in April this year, when customers of four rural banks, Yuzhou Xinminsheng Rural Bank, Shangcai Huimin Rural Bank, Zhecheng Huanghuai Rural Bank, and Guzhen Xinhuaihe Rural Bank in Henan province, suddenly learnt that they can’t withdraw their deposits. The official reason given was that there was an issue with the system when it was being upgraded, and the accounts were blocked by the system. Another bank in Anhui province, Guzhen Xinhuaihe Village Bank, also faced the same problem, but the number of depositors of that bank is less.

While there was no other official communication for the matter, in May the Chinese authorities announced that they have launched an investigation into several shareholders of Henan Xincaifu Group. And in this probe, it was found that Henan Xincaifu Group had taken control of the five rural banks through “internal and external collusion” and “illegally” collected deposits. While the criminal investigation was going on, the customers were still not allowed access to their money, for over four months.

The probe found that the Henan Xincaifu Group colluded with the employees of the rural banks to collect deposits form people, and used those money to invest in financial products via online platforms. They transferred the money from deposit accounts to the investments by fabricating lending agreements. This scan was going on from 2011. While investments were made in the name of depositors, they were not aware of it, and never received high returns that such investments yield.

However, to attract more customers, the banks were promising higher than usual interest in Chinese banks. Thus, they were able to attract customers from all over the country, not just in the region. This was also a deviation from norms, as rural banks are supposed to cater to local populations only. Henan covered up its illegal activities by tampering with business data, according to the Chinese banking regulator. The company also didn’t pay interest for the money it collected from the banks.

Protest by depositors in Zhengzhou, Henan province

As most of the money collected by the five rural banks were diverted to financial markets, their own assets depleted rapidly, pushing the banks to the brink of bankruptcy. As a result, the banks stopped allowing withdrawals from April this year. The customers have been asked to ‘wait patiently’ to receive their money.

China Banking and Insurance Regulatory Commission (CBIRC) said that customers will be paid their principal in batches. However, this assurance came only after series of protests by the affected depositors. In fact, the protestors were assaulted by a group of unidentified people on July 10.

The regulator has started with payment to customers with small deposits, and people with deposits of less then 50,000 yuan (over 5.90 Lakh Rupees) received their money on Friday. However, those with higher deposits are facing issues in registering their claims due to an overloaded system.

While the extent of the scam is not known, thanks to tight control of information by the Chinse govt, media reports estimate that around 39 billion yuan are deposited in the blocked bank accounts.

The visuals of tanks on the streets of China to crush protests is a grim reminder of the Tiananmen Square massacre on June 4, 1989, when Chinese authorities had sent tanks and heavily armed troops to crush protests by students in Tiananmen Square in Beijing demanding democracy and civil rights. As China had completely censored the incident, details of casualties from the massacre is not known, but it is estimated that hundreds of protesters were killed, if not thousands.

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OpIndia Staffhttps://www.opindia.com
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