(Ecns.cn) – Under the current tightened monetary policy, not only China's "Big Four" state-owned commercial banks but also small- and medium-sized regional ones are all making every effort to attract as much deposited money as possible. Occasionally those efforts result in questionable or even scandalous behavior – and a heightened sense of risk for us all.
Lurid tactics
Last month, a picture of a group of young girls dressed in red and pink caused a stir on the Internet once insiders revealed that they worked for a commercial bank hoping to attract customers, according to Business.
In China, when someone mentions girls dressed in such brightly colored costumes, it often implies that they are prostitutes waiting for customers at night.
Other reports of inappropriate behavior include bank directors wining and dining VIP clients until they end up in hospitals with bleeding stomachs. Also, some bank staff members have admitted to refusing to allow customers to withdraw money at the end of the month in order to ensure excellent performance evaluations.
So what exactly is at the root of such behavior?
This year, the People's Bank of China, the country's central bank, has raised the benchmark interest rate three times and increased the reserve requirement ratio six times in order to curb soaring inflation. On September 5, the central bank began broadening the scope of reserve ratios to include margin deposits, a measure being phased in over six months. This single policy will freeze a sum of over 900 billion yuan ($139.14 billion), equal to raising the reserve requirement ratio two to three times.
As a result, all banks have fallen into a serious cash deadlock. Loans for small- and medium-sized enterprises and personal housing have all become harder to get, a clear signal that the banks are running out of cash.
