China’s Probe of Rural Bank Chief Renews Worries Over Small Banks’ Health

Chinese characters reading, "seriously disrupting the financial order, jeopardizing economic, financial security and even social stability" are seen on a scrolling display at a branch of Yichuan Rural Commercial Bank in Yichuan County, Henan Province, China on Oct. 30, 2019. Huizhong Wu/Reuters

BEIJING—China’s anti-corruption watchdog said on Oct. 30 it is investigating the former chairman of a rural bank for suspected corruption, and the central bank promised to take “forceful” measures to preserve financial order after depositors rushed to withdraw their savings.

Fears of poor management, risky lending practices and high levels of hidden debt at China’s thousands of small and rural banks have spurred regulators to tighten scrutiny this year. Financial strains have increased as economic growth slows to near 30-year lows.