Hundreds of depositors have raced to pull their cash from a small rural bank in eastern China, forcing local officials to take emergency measures to calm the panic after the bank run began to spread.
Coming just weeks after the first true default in the Chinese bond market, the run on Jiangsu Sheyang Rural Commercial Bank is the latest sign of growing stresses in the country’s financial system.
But it has also been a localised event, contained to one farming county where a series of lightly regulated credit co-operatives and loan guarantee companies failed earlier this year after mismanaging funds.
Worried depositors rushed to Jiangsu Sheyang Rural Commercial Bank after rumours spread that it was on the verge of collapse, according to state media. The panic first hit the bank’s branch in an industrial park on Monday. On Tuesday, big queues of depositors gathered at its branches in at least three other villages in Sheyang county, according to the Xinhua news agency.
The bank took a series of steps to try to reassure people. Photographs showed that the bank had prepared large bricklike stacks of renminbi to meet the demand for withdrawals. On the dot matrix sign outside one stricken branch, the bank promised to operate uninterrupted for 24 hours to serve people withdrawing money.
At its doors, the bank broadcast a recorded message on repeat: “Savers’ deposits are protected by law. There is no situation in which we cannot meet cash withdrawal demands. Depositors must not listen to rumours and cause unnecessary panic.”
But these measures failed to allay concerns. Throughout the day on Tuesday, crowds gathered in the rain outside the bank to withdraw cash.
With the panic reaching other branches of the bank, the government intervened on Wednesday. In a video posted on the local government’s website, the governor of Sheyang county promised depositors that their mone