49 Depositors’ Funds Disappeared in ICBC Bank

49 depositors who had ¥15 million (over $212,000) saved at the Industrial and Commercial Bank of China (ICBC) were shocked that their money just vanished into thin air. The victims were told that “the money was not deposited to begin with, and it has nothing to do with the bank. It was a fraud committed by a manager of the bank representing personal behavior but not the bank’s. The manager had resigned and was arrested by the police.” Further details revealed that the manager has promised high-interest deposits to customers and issued receipts for those deposits in 2016. The bank insists that these receipts are not formal deposit certificates of ICBC.

The victims claimed that the manager had completed all the transactions with them in the lobby of the bank during normal business hours by using the bank’s credentials as a guarantee. The clients conducted transactions with him only because he was a formal employee of the ICBC with an official title using ICBC’s physical address, as a result the bank should at least share some of the responsibility. However, ICBC refused to take any legal consequences for the matter or to compensate for their clients’ loss by any means.

This is not an isolated incidence when the funds depositors placed in banks mysteriously disappeared. China Construction Bank was also involved in the disappearance of deposits in recent years. A depositor put ¥1.2 million (about $170 K) in China Construction Bank for 15 years. In June 2020, she went to the bank to withdraw her money for a family emergency, and found out that not only all her $170 K went completely missing, but also she now owes the bank ¥130,000 (over $18 K) for unknown loans and credit card debts under her name. After some probing by the bank, it was determined that the bank manager had used the depositor’s personal information likely with fake ID and false phone numbers and transferred ¥693,000 out of her account. There was no trace of the remaining ¥500,000.

Those two incidents revealed that the bank’s strategy for any crimes or thefts committed by the bank’s employees is to blame those individuals instead of admitting it is a system’s failure. Banks are not held accountable for the loss of depositors’ property. However, does the bank really have nothing to do with it when its employee defrauded ¥15 million and the bank had no knowledge about it in the past 6 years? What is the standard of hiring their employees and what measures are taken to prevent the employees from stealing? What policies and legal systems are in place to protect consumer’s rights? It is not about throwing blames around when issues arise; instead, the crux of the matter is to install a fail-safe system to truly protect the consumers, as the Federal Deposit Insurance Corporation (FDIC) does for US depositors by providing deposit insurance, examining and supervising certain financial institutions for safety and soundness. Otherwise, depositors are at their own risk dealing with banking system and it is almost impossible to restore trust once lost.

In less developed regions from China, such as Nanjing city where I live temporarily, the national commercial banks can be a disaster: full of low quality service, fraudulence, crimes. That is why we desire international banks such as Citi, HSBC could extend their branches here.