Fun

Escalating Bank Runs Spur Chinese Government to Require Approval for Large Cash Transactions

News Feed - 2020-07-08 03:07:56

Escalating Bank Runs Spur Chinese Government to Require Approval for Large Cash Transactions


A series of bank runs has prompted the Chinese government to begin requiring approval for large cash deposits and withdrawals at commercial banks, starting with banks in a northern province. Recently, two bank runs happened within a week as people lost faith in financial institutions amid unprecedented economic contraction.China’s Efforts to Prevent Bank Runs


China has launched a measure aimed at curbing bank runs. Starting July 1, residents of the northern province of Hebei are required to “apply for approval if they plan to make large cash deposits or withdrawals at commercial banks,” the South China Morning Post reported Sunday. The publication detailed:The regulation comes after a series of bank runs in the past year at debt-laden small lenders and as an unprecedented pandemic-related economic contraction starts to take a toll.


Residents “will need to provide information about the source of deposits or the purpose of withdrawals for transactions over 100,000 yuan (US$14,162) for individuals, and 500,000 yuan for corporations,” the state-backed China Securities Journal described. “Applicants will have to give one day’s notice to the bank to make a withdrawal of this size or larger, and gain the branch’s approval of the registration information.”


This requirement will be expanded to banks in Zhejiang province and the city of Shenzhen in Guangdong province from October 1 for individual account transactions of more than 300,000 yuan and 200,000 yuan, respectively.




The regulation requires “every commercial bank to integrate their information systems to minimise the amount of reporting required by individual customers,” the Journal noted, claiming that this regulation primarily targets “transactions conducted with physical cash through quick, self-service deposit and withdrawal equipment that avoided monitoring.”


Many small lenders in China are facing problems such as rising number of non-performing loans, insufficient capital, and poor governance. Last month, runs on two small lenders happened within a week. The news outlet reported that customers mass-withdrew their money from Baoding in Hebei province and Yangquan in Shanxi province over concerns about the health of the banks. While China guarantees deposits of up to 500,000 yuan per bank, the publication conveyed that investments in wealth management products are not protected.


What do you think about China’s cash transaction measure to curb bank runs? Let us know in the comments section below.Bitcoin Price Poised for "Imminent" Breakout As Network Hashrate Hits Record HighsNEWS | 40 mins agoThe Popular Stablecoin Tether Is Now Circulating on the Bitcoin Cash NetworkNEWS | 4 hours agoTags in this storybank runs, capital control, cash transactions, China, chinese banks, deposits, economic contraction, Withdrawals


Image Credits: Shutterstock, Pixabay, Wiki CommonsUse Bitcoin and Bitcoin Cash to play online casino games here.Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.Read disclaimer Show comments

News Feed

Pantera CEO Wants a Reminder the Day Before a US Bitcoin ETF Launches — ‘I Might Want to Take Some Chips off the Table’
Pantera CEO Wants a Reminder the Day Before a US Bitcoin ETF Launches — "I Might Want to Take Some Chips off the Table" On October 6, Pantera Capital published an investor’
New Draft Law in Uruguay Could Legalize Crypto as Payment Method
New Draft Law in Uruguay Could Legalize Crypto as Payment Method A new draft law introduced to the Senate in Uruguay could regulate cryptocurrency transactions,
Brayden Lindrea8 hours agoLido Finance discloses 20 slashing events due to validator config issuesThe initial impact amounted to 20 Ether, worth $31,000, while the validator involved has now been taken offline.1297 Total
Cross-Chain Bridges That Connect 5 Different Blockchains to Ethereum
Cross-Chain Bridges That Connect 5 Different Blockchains to Ethereum During the last few months, cross-chain bridge technology has grown a great deal and users can now swap assets
Kevin O’Leary Expects Bitcoin to Go up When Stablecoin Transparency Act Passes
Kevin O"Leary Expects Bitcoin to Go up When Stablecoin Transparency Act Passes Shark Tank star Kevin O’Leary, aka Mr. Wonderful, expects the price of bitcoin to go up when th
Derek Andersen4 hours agoZimbabwe central bank close to introducing gold-backed digital tokens into retailPhysical and digital gold tokens have been a big success as investments and an inflation hedge in Zimbabwe, which
Pakistanis Own $20 Billion in Crypto, Report Reveals
Pakistanis Own $20 Billion in Crypto, Report Reveals In the absence of regulations, people in Pakistan have invested a serious amount of money in digital assets. New research claim
Privacy-Centric Monero Plans for July Hard Fork, Plans Include Ring Signature, Bulletproof Upgrade
Privacy-Centric Monero Plans for July Hard Fork, Plans Include Ring Signature, Bulletproof Upgrade According to a recent update on Monero’s Github repository, the privacy-ce
SEC-retly Failing: How the SEC Is Letting Crypto Down
SEC-retly Failing: How the SEC Is Letting Crypto Down When Gary Gensler (ex-Goldman Sachs investment banker) was announced as the new head of the Securities and Exchange Commission
CEO of Mirror Trading International Bitcoin Ponzi Scheme Arrested in Brazil
CEO of Mirror Trading International Bitcoin Ponzi Scheme Arrested in Brazil Johann Steynberg, the wanted CEO of Mirror Trading International was recently arrested by Brazilian law
Economist David Rosenberg Pleads Ignorance on Bitcoin After Predicting Massive Bubble
Economist David Rosenberg Pleads Ignorance on Bitcoin After Predicting Massive Bubble Economist David Rosenberg has pleaded “ignorance on bitcoin” af
Rarible NFT Marketplace Integrates Tezos Blockchain, Will Support Ubisoft Digits
Rarible NFT Marketplace Integrates Tezos Blockchain, Will Support Ubisoft Digits On Wednesday, the non-fungible token (NFT) marketplace Rarible announced that the platform now supp