Beijing: Chinese administration have gave a comitment to repay bank customers battered by a financial scandal that has sparked a rare public protest in  China.

The national banking regulator said in a statement on Monday that customers of five rural banks in the provinces of Henan and Anhui who have had their funds frozen since April will receive their money back. Customers with deposits up to 50,000 yuan ($7,442) would begin receiving their money back starting on Friday, according to the China Banking and Insurance Regulatory Commission. Payment plans for other customers would be revealed separately.

According to the regulator, money used for "illegal or criminal" activity won't be repaid at first.

Police reported on Sunday that they had detained several suspects who had taken over a number of banks through a group company and made unauthorised transfers using false loans.

The banking scandal, which is regarded as one of the largest financial scandals China has ever experienced, has recently sparked a number of protests that have been violently suppressed by the authorities. Following similar protests in May and June, an estimated 1,000 depositors gathered outside the People's Bank of China in Zhengzhou city on Sunday to demand their money back.

Online videos were circulating of unidentified men dragging and beating up protesters wearing white clothing. Some protesters claim that local law enforcement and government representatives collude with banks, including by preventing them from entering public spaces by using the nation's COVID health passes.

The health codes of more than 1,300 customers were changed by five officials in Zhengzhou in June, preventing them from using public transportation or going anywhere else.
Public protests are uncommon in China because the Communist Party in power strictly controls the country's dissent.

Even so, occasionally disgruntled citizens succeed in organising large-scale demonstrations, running the risk of being detained and prosecuted in the nation's hazy legal system.

Some depositors suffered broken bones and eye injuries after the clashes turned violent, according to depositors who shared their diagnoses with the Financial Times. Local security forces quickly intervened to disperse the crowd because they outnumbered the protesters. 

Conflicts in Henan brought to light the challenges facing the province's financial institutions as Beijing tries to control financial risk. A crackdown on highly leveraged developers has recently put pressure on cash flow at many local banks.

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