February 3, 2023

A huge line of customers stretching along the street outside an Australian bank has sparked a number of theories – many suggesting it could be the start of a run on Chinese-owned banks.

Dozens of Sydney residents waited outside the Haymarket branch of the Bank of China in the city’s CBD on Tuesday morning.

The photo was shared on Reddit with the person who took the photo and said they’d seen similar queues outside the bank every morning for the past few weeks.

Many proposed clients are now rushing to withdraw their funds after funds were frozen at four Chinese banks over suspicion of fraud.

Thousands of customers of the four rural banks in China’s Henan province have frozen their savings since mid-April after withdrawals were suddenly stopped.

Withdrawals and deposits were also suspended at a bank in neighboring Anhui province, with a total of $8.5 billion believed to be locked up at all five banks.

Dozens of Sydney residents waited outside the Haymarket branch of the Bank of China in the city’s CBD on Tuesday morning.

The freeze sparked rare street protests last month with China’s banking regulator blaming the crisis on suspected mismanagement by bank shareholders and vowing to “severely punish financial crimes.”

Reddit users believe the controversy in China has sparked fear among customers Down Under to make sure their own money is safe.

“If this is the local branch of the Bank of China, people could be afraid it will go under and withdraw their savings,” one wrote.

‘People are afraid that their bank is not liquid. So everyone is afraid they’ll run out of money and want to take everything they can,” commented another.

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But many ditched that theory, saying instead that the long lines were most likely international university students transferring their funds to an Australian bank account.

Some Reddit users pointed out that there is no fee to transfer money from their Chinese Bank of China account to their Australian one.

Given the recent opening of the borders, it is likely that this also contributed to the long wait times.

“I’ve walked past this every day and they’re all young and given forms to fill out, so it seems like I’m setting up new accounts,” said one.

Many have suggested customers are now rushing to withdraw their funds after cash was frozen at four Chinese banks following a suspected fraud case

“Mainly because international transfers between BOC account in China and BOC account in Australia do not incur any transaction fees,” wrote another.

‘Many Chinese students who have arrived in Sydney go there to create their account.

“In general, it has nothing to do with the banking crisis in Henan Province.”

The Henan banking crisis was described by authorities as a complex scam involving a private financial group that had interests in the lenders and falsified that data by colluding with bank staff and illegally transferring money.

Balances at a bank in the eastern province of Anhui were also frozen.

To restore depositors’ confidence in the sector, authorities in Henan and Anhui have issued refunds to smaller depositors from July 15 following investigations and arrests.

Obviously, many are still trying to get their savings back.