Vision Times reported on July 19 that many banks in Beijing, Shandong, Hainan, and other places had frozen their customers’ accounts as dissatisfied homebuyers are staging a nationwide mortgage boycott.
As a result, cardholders can now only deposit but not withdraw their money. Online transactions are also restricted.
According to China Securities Daily, a customer service staff at a large state-owned bank in Hainan claimed that this operation is to identify and deal with accounts related to abnormal, illegal, and criminal activities.
More specifically, this crackdown will focus on online gambling, telecom fraud, virtual currency, money laundering, low account activity, abnormal transactions, and incomplete information.
The report noted that many Chinese banks upgraded investigations on inactive accounts early this year. Previously, only accounts with zero balance were classified as inactive. But now, the rules have become much stricter.
According to an account manager at a bank in Beijing, accounts having no active customer transactions for more than three consecutive years, having current account balances of less than $1.50, having no credit cards, personal loan repayment, and other collection and payment agreements will also be within the scope of this investigation. Whenever abnormal transactions occur, banks will freeze those accounts.
Regarding this crackdown, Vision Times reported that many Chinese citizens think the banks do this to solve their own insufficient cash flow problems amid mortgage boycotts across the country.
As of November last year, data from the Central Bank showed that Chinese banks and other payment institutions took action to review 1.48 billion bank accounts related to inactive status, multiple cards per customer, frequent loss reports, and card replacements. After the inspection, 620 banks had their account opening facilities suspended for 1-6 months owing to sloppy practices.