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Finance

Several Chinese local banks freeze deposits, triggering protests

$1.5bn from 1m customers locked after lenders operated outside their region

About $1.5 billion of customer cash is believed to be in limbo after small, locally focused Chinese banks froze deposits, citing system updates.   © Reuters

SHANGHAI -- Protests have broken out in China after several regional banks prevented customers from making withdrawals in late April, stoking fears of a greater credit crisis without an intervention from financial authorities.

At least three institutions based in Henan Province -- Yu Zhou Xin Min Sheng Village Bank, Shangcai Huimin County Bank and Zhecheng Huanghuai Community Bank -- have frozen a total of 10 billion yuan ($1.49 billion) in deposits, according to Chinese reports. One million customers are believed to be affected.

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