Chinese police have arrested more than 200 people in connection with one of the country’s biggest banking scandals, which has sparked rare large-scale protests.
In April, after being accused of mismanagement by regulatory authorities, four banks in central Henan province suspended cash withdrawals and froze the funds of hundreds of thousands of customers, sparking protests that sometimes ended in violence.
Police said on Monday they had arrested 234 people linked to the scandal and were making “significant progress” in recovering the stolen money.
“A criminal group … illegally controlled four municipal banks … and is suspected of having committed a series of serious crimes,” Xuchang city police said in a statement Monday.
China’s rural banking sector has been hit hard by the financial measures taken by Beijing to contain the housing crisis and the sector’s rising debt, which have had repercussions throughout the national economy.
Regulators have gradually offered refunds to customers since mid-April.
On Monday, the Henan banking and insurance regulatory agency promised to return the money starting this week to everyone who had between 400,000 and 500,000 yuan ($57,900 to $72,300) in deposit.
Customers with smaller amounts have already received their money.
The magnitude of the fraud, apparently established for more than a decade, dealt an unprecedented blow to public confidence in China’s financial system, analysts said.
A large protest by affected customers on July 10 in the provincial capital of Zhengzhou was violently ended by police, who beat and forced protesters onto buses, according to witness accounts heard by AFP and verified footage posted on social media.