From Mega Lenders to Rural Branches, China’s Banking Purge Intensifies Amid Financial Turmoil
Udumbara
A nearly three-year running anti-corruption drive has swept through every corner of China’s finance sector, toppling hundreds of mid- and high-level banking officials—from vice-ministerial figures at Beijing headquarters to branch managers in remote counties.
The campaign, which began in late 2022, now blankets all six state-owned megabanks, the three big policy lenders, and dozens of provincial and city institutions.
Since 2023, at least 200 banking officials have been investigated or punished, according to The Epoch Times’ tally based on official announcements.
Insiders say the campaign is a system-wide reset aimed at dismantling patronage networks that fueled reckless lending, triggered the property bust, and left local governments drowning in off-book debt.
A Sector-Wide Dragnet
Official notices show scarcely a week has passed this year without a banker’s downfall.By the end of April, the CCP’s Central Commission for Discipline Inspection (CCDI) had opened 90 finance-sector investigations, 63 of them in banks.
The six megabanks alone have lost 34 executives—10 at China Construction Bank (CCB), six at Industrial and Commercial Bank of China (ICBC), seven each at Agricultural Bank of China (ABC) and Bank of China (BOC), and two apiece at Bank of Communications (BoCom) and Postal Savings Bank of China (PSBC).
The three policy lenders have shed 11 senior staff—five at the Agricultural Development Bank of China, the rest at China Development Bank and the Export-Import Bank of China.
Another 14 cases involve rural credit unions and city commercial banks across Guangdong, Sichuan, Shandong, Yunnan, and Hubei, plus multiple arrests at Sichuan, Guizhou, and Jiangxi banks and Chongqing Rural Commercial Bank.
April alone saw at least seven detentions, among them former CCB Henan President Shi Tingfeng—later chair of CCB Pension Co. and deputy director of the bank’s think tank—and former CCB Vice-President Lu Jianhua.
Their removal underscored the campaign’s reach into both provincial power bases and Beijing’s corporate suites.
“This is a vertical, through-and-through purge,” Peng Desheng, a policy adviser at BoCom in Beijing, told The Epoch Times.
Why Beijing Is Moving Now
When China’s property boom went bust in late 2021, land prices fell and mortgage demand evaporated, wiping out the collateral underpinning trillions of yuan in bank loans.At the same time, local governments can no longer play savior.
For years, provinces and municipalities used “local-government financing vehicles,” or LGFVs, shell companies they created to borrow off the books to fund roads, subways, and industrial parks and other infrastructures, betting that land-sale revenue and a booming property market would cover the bill.
That bet has soured.
Each quarter, at least 1 trillion yuan (about $137 billion) in LGFV bonds come due, forcing officials into a nonstop scramble for fresh cash.
“Most of [the banking officials] who fell from grace worked in units that had already been flagged—problems had been festering for years,” Sun Tao, a Chinese economist and financial law scholar from Shandong University, told The Epoch Times.
How the Money Machine Worked
Insiders describe a system driven by relentless lending quotas and lubricated by kickbacks.Mr. Guo, a retired manager at a Guangdong branch of a state bank, said many local presidents used middlemen to steer loans to “favored companies,” siphoned off a cut, and moved the money offshore to buy property.
“Within the system, we’ve long known risks were piling high. Many local branches are forced by ‘targets’ to push out loans; without lending, they can’t hit quotas,” Mr. Guo told The Epoch Times.
He said that many of those now under investigation are ‘old banking hands’ who rose through the ranks through political–business ties.
“Some executives shifted their profits overseas as early as 2015—buying real estate in Australia and Japan that is now worth many times more. Several are under exit bans and can’t leave China, so the houses may just sit there,” he added.
A Pre-Condition for Reform Amid Financial Crisis
Yao Liming, a Beijing-based financial-regulation consultant, calls the purge both “political cleansing and a precondition for financial reform.”Even low-level managers have been targeted, he noted, showing that politics and risk control are marching in lockstep.
A Shanghai-based fintech executive, requesting anonymity, frames the purge as overdue triage.
“Banks have been used to plug local-government fiscal gaps and to facilitate capital flight for local elites. Many lenders are rolling over bad loans with new credit. Regulators know it. The campaign is both a reckoning and a way to clear space for the next round of restructuring,” he told The Epoch Times.
“The current campaign is just dealing with problems accumulated over the past decade or more.”
By pursuing every tier—from headquarters to county branches—Beijing appears to be breaking the chain that turned a heavily indebted banking system into a flash point of China’s ongoing financial crisis.
