Is The China Bank Run Beginning? Farmers Co-Op Unable To Pay Depositors

ZeroHedge

While most of the attention in the Chinese shadow banking system is focused on the Credit Equals Gold #1 Trust’s default, as we first brought to investors’ attention here, and the PBOC has thrown nearly CNY 400 billion at the market in the last few days, there appears to be a bigger problem brewing. As China’s CNR reports, depositors in some of Yancheng City’s largest farmers’ co-operative mutual fund societies (“banks”) have been unable to withdraw “hundreds of millions” in deposits in the last few weeks. “Everyone wants to borrow and no one wants to save,” warned one ‘salesperson’, “and loan repayments are difficult to recover.” There is “no money” and the doors are locked.

The locked doors of one farmers’ co-op…

Via China CNR,

Shadow Banking has grown remarkably…

…in recent years, opened dozens of Yancheng local “farmers mutual funds Society”, these cooperatives approved the establishment by the competent local agriculture, and received by the local Civil Affairs Bureau issued a “certificate of registration of private non-enterprise units.”

As savers are promised big returns…

Deposit-taking and lending by cooperatives operated operation, and to promise savers, depositors after maturity deposits not only can get the interest, you can also get bonuses.

But recently things have turned around…

However, beginning in early 2013, Yancheng City Pavilion Lakes region continue to have a number of co-op money people to empty, many savers deposits can not be cashed, thus many people’s lives into a corner.

 

Dong-farmers in Salt Lake Pavilion mutual funds club, a duty officer’s office, told reporters, because many people take money, put out loans difficult to recover, leading to funding strand breaks.

Rough Google Translation:

Salesperson: …the money has been slowly falling and in the end is difficult to ask for money, right? And now there is no money coming in, now people don’t want to save money, and take all the money.

Reporter: But it’s their money, they should be able to…

Salesperson: I know I should [given them money]; however, when the turn started, their is no money, we get cut off and lenders and borrowers took 

continue article at ZeroHedge:

http://www.zerohedge.com/news/2014-01-23/china-bank-run-beginning-farmers-co-op-unable-pay-depositors