China to accelerate disposal of smaller banks’ bad loans

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FILE PHOTO: llustration photo of a China yuan note

BEIJING – China may start a pilot program in six provinces to further speed up the disposal of bad loans by local small- and medium-sized banks, financial news media outlet 21jingji reported on Friday.

The move came after a rural banking scandal in central China’s Henan province and eastern Anhui province threatened public confidence in the country’s financial system.

Multibillions of dollars of deposits have been frozen in several local banks in what authorities have said was a complex scam.

As of Thursday night, authorities have repaid 18.04 billion yuan ($2.68 billion) to 436,000 depositors, the media outlet reported, citing officials at China Banking and Insurance Regulatory Commission as saying at a briefing.

That accounted for 69.6% of depositors being affected and 66% of involved deposits, 21jingji reported.

($1 = 6.7419 Chinese yuan renminbi)

(Reporting by Ziyi Tang and Ryan Woo; Editing by Mark Heinrich)

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