Another significant event has occurred recently in our country's financial sector, with a constant stream of news. Just recently, it was revealed that two banks in Hebei announced their dissolution, followed by the news that a bank in Liaoning was taken over by another bank. In the past few days, a trust institution also declared bankruptcy. The most concerning question for everyone is whether the money deposited in these banks can still be withdrawn? Will such incidents continue to happen in the future? Today, let's understand this issue together:

Here's what happened: On June 24, 2022, the Hebei Banking and Insurance Regulatory Bureau successively issued two announcements, approving the dissolution of two rural commercial banks under its jurisdiction. Then, on July 2, a bank in Liaoning issued a public notice, claiming that the bank would be smoothly taken over by Shenyang Rural Commercial Bank. Prior to this, on June 16, one of the earliest established trust institutions in our country, Xinhua Trust, also declared bankruptcy after being taken over for 2 years.

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Perhaps observant friends have also noticed that such incidents seem to be increasing in recent years, with many small and medium-sized banks and financial institutions facing operational difficulties and increasing chances of problems. News of takeovers, bankruptcies, and other issues gradually come into our view. At this time, let's not discuss the reasons for their problems, but focus on a question that is of great concern to the public: if we deposit money in these banks and then the banks suddenly encounter problems, can the safety of our deposits still be guaranteed?

After carefully reviewing the recent announcements from various banking and insurance regulatory bureaus, I found that whether it's declaring bankruptcy or being taken over, these bureaus are relatively cautious when issuing such announcements. They ensure a more complete handover of the bank's business, assets, property, and debts after bankruptcy.

Take the recent example of the two rural commercial banks in Hebei. When declaring bankruptcy, all previous business was inherited by Zhangjiakou Bank. This means that our ordinary people's deposits can continue to be deposited, withdrawn, or transferred at the new bank taking over, without any impact.

In fact, during the operation of banks, they are always under the strong supervision of local banking and insurance regulatory bureaus, the People's Bank of China, and other regulatory authorities. Once any problems arise, they are timely detected and corrected. If a bank does indeed have operational issues, the regulatory authorities will usually intervene at the very beginning, that is, before the major problems arise. The most common approach is to find a stronger bank to take over. After a certain period of takeover, allowing many businesses to have a stable transition, a more appropriate solution will be made.Therefore, if one day you discover that a bank where you have deposited money has been taken over, there is no need for undue concern. Based on many past cases, after a bank is taken over, the personal deposits of the general public will be fully honored. At worst, there is the central bank's deposit insurance system, which guarantees up to 500,000 yuan, so there is no need for excessive panic. If you are still not at ease, for smaller banks, as long as you keep your deposit balance within 500,000 yuan, there will be no issues.

Of course, if the bank where your deposits are held is taken over or goes bankrupt, it is likely that retrieving your deposits will involve a lengthy waiting process, and it is important to be mentally prepared for this.

Will such occurrences become more frequent in the future?

In my opinion, they likely will, as our country currently has more than 4,000 financial institutions, most of which are relatively small in scale. Over time, the characteristics of many small and medium-sized banks, such as weak risk resistance and poor profitability, will gradually be exposed. Consequently, the chances of encountering operational difficulties will also increase. At such times, if several small banks can merge into a larger one or be acquired by other larger banks, it is undoubtedly a good alternative.

In summary, as the socio-economic environment continues to change, the development of banks is facing unprecedented challenges. How to survive in an unpredictable market environment is a problem that every bank has to face. As ordinary people, while being cautious in choosing investment products, it is also advisable to be particularly careful when selecting investment institutions.

What is your view on the situation of bank bankruptcy and collapse?

We welcome your comments and discussions, let's explore this together.That concludes the content of this episode. If you have any further interests in the field of finance and wealth management, please feel free to leave me a message.