China: Fake bank swindles customers out of $32m

Chinese TV footage of inside the bank showing the counters Image copyright Nanjing Broadcast Station
Image caption The "bank" appeared legitimate to the 200 people who handed over their money

A fake bank which was set up to look just like a real one has swindled Chinese savers out of 200m yuan ($32m; £21m), it's reported.

To customers in the eastern city of Nanjing the interior looked like any other state-owned bank, with uniformed clerks working behind the counters, the Southern Metropolis Daily website reports. Almost 200 people deposited their cash, including a businessman who handed over 12m yuan ($1.9m; £1.3m) in 2014. But he grew suspicious when he wasn't paid the promised interest on his money, and went to the police after the bank refused to return his savings. A police investigation found that it was actually a rural cooperative, which had none of the accreditations required to operate as a bank. It had been promising interest rates of 2% per week and high interest subsidies, police say.

The fact the "bank" was able to operate for so long has left some Chinese social media users incredulous. "More than a year, it looks like the authorities have gone blind," says one user on the Weibo social network. "Fake banks, and a fake local government," comments another user. Police have arrested five people over the scam, including a woman who reportedly high-tailed it to Macau, China's famous gambling centre, with the customers' money.

Use #NewsfromElsewhere to stay up-to-date with our reports via Twitter.