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The five banks involved in the case - Yuzhou xinminsheng village bank, shangcaihuimin village bank, Zhecheng Huanghuai village bank, Anhui Guzhen xinhuaihe village bank and Kaifeng New Oriental Village bank are all village banks. According to the Interim Provisions on the administration of rural banks issued in 2007, rural banks refer to banking financial institutions established in rural areas with the approval of the China Banking Regulatory Commission (now the CBRC) in accordance with relevant laws and regulations, funded by domestic and foreign financial institutions, domestic non-financial institutions, enterprise legal persons and domestic natural persons, and mainly providing financial services for local farmers, agriculture and rural economic development. Since the pilot project was launched in 2006, rural banks have become "micro banks" with the largest number of institutions, the smallest single scale, the most basic level of customer service, and the most prominent characteristics of supporting agriculture and supporting small businesses. According to the data of 2021, there are 1642 rural banks in China, of which the direct and indirect shareholding of private capital accounts for more than 70%.

Due to the self-evident important role of village banks in "Inclusive Finance" and "sinking service", it was once considered as an important direction for the future development of China's financial industry. However, due to their inherent factors, village banks often have some problems, such as inadequate internal management, relatively low personnel quality, poor business process risk control, and weak awareness of serving customers' credit. These problems are likely to have a significant impact on the overall risk management of village banks, especially the legal risk management. In addition, with the change of economic cycle in recent years, a few rural banks have gradually deteriorated into high-risk institutions, seriously affecting and restricting their sustainable development and financial service capacity.

In order to make up for the weakness of the brand, some rural banks offer higher interest rates to depositors to attract deposits; By using the rapid development of Internet technology in recent years, combined with the ubiquitous third-party deposit platform, bank proprietary app and wechat applet, the service coverage far exceeds that of traditional rural banks. However, at the same time, the risk management capacity of the above rural banks has not been correspondingly improved, which may spread the regional risk to the whole country, which is equivalent to planting a hidden "time bomb".

In view of the above reasons, in January 2021, the China Banking and Insurance Regulatory Commission and the central bank issued the notice on regulating commercial banks to carry out personal deposit business through the Internet, stopping commercial banks from carrying out fixed deposit and fixed and flexible deposit business through non proprietary network platforms, including but not limited to providing marketing publicity, product display, information transmission, purchase and import, interest subsidies and other services by non proprietary network platforms. In March of the same year, the CBRC also issued the measures for the quality management of liabilities of commercial banks, further requiring commercial banks to strictly implement the relevant provisions on the management of deposit interest rate and interest calculation and settlement, and standardize the behavior of taking deposits, and shall not take illegal means such as illegal rebate taking deposits, taking deposits through a third-party intermediary, delaying payment taking deposits, taking deposits by transferring loans to deposits, and withdrawing and counting interest on files in advance to absorb or falsely increase deposits. So far, the popular Internet deposit business has fallen into the wind. However, there are still some rural banks that induce customers to handle the above-mentioned businesses by means of edge ball, such as the diversion of the official website.

In this case, the relevant rural banks use the mobile terminal applet to solicit deposits online, and the annual interest rate after providing fixed interest rates and platform integral subsidies can reach 4.1%-4.7%, which is much higher than that of other banks. Such a high interest rate has attracted many depositors all over the country. Some even deposited their whole family's life savings in the above rural banks without realizing the risks faced by their deposits - the five rural banks involved in the case were warned and punished for serious violations; Xuchang rural commercial bank, the common major shareholder of the five banks, has quite scattered shareholders. There are 76 enterprises and individuals, of which 30 are listed as dishonest Executees, and the vice president of the bank is wanted by Xuchang police.

According to the rating results of financial institutions released by the central bank in the fourth quarter of 2021, among China's existing commercial banks, rural cooperative institutions (including rural commercial banks, rural cooperative banks and rural credit cooperatives) and rural banks have the highest risk. The number of high-risk institutions is 186 and 103 respectively, and their assets account for 5% and 7% of this type of institutions respectively. Rural banks, which used to be popular in the past, have now reached the "crossroads".

Legal analysis: what are the ways for depositors to protect their rights? What are the risks?

According to the current disclosure, this case involves the chaotic internal management of the bank, a large number of illegal operations, some bank staff suspected of illegal absorption of public deposits and other criminal acts, as well as the possible breakage of the fund chain of the bank's related parties. However, the above risks are not caused by the depositor's fault, and the adverse consequences thereof shall not be borne by the depositor. As long as the depositor's funds are recognized as savings, he shall enjoy the freedom of withdrawal according to law and may request withdrawal at any time. If the reasonable request is rejected by the bank, the depositor may protect his rights according to law. However, as the number of depositors involved in this case is large and the situation is complex, it does not rule out that some depositors are indeed faced with the risk that their funds cannot be recovered. In this regard, the author will further elaborate on the key points.

As mentioned above, the five rural banks in this case have a large number of illegal operations, and some staff members are more likely to be suspected of committing crimes. It can be seen from the report that the bank tried to attribute the responsibility to the illegal and criminal acts of some staff members, thus claiming that the resulting debt had nothing to do with the bank, but this argument is untenable in law. In this case, although depositors were tempted by high interest rates to deposit in other places, they went through the relevant deposit procedures in accordance with the channels and procedures designated by the bank. For example, many depositors mentioned that the relevant small procedures could be switched from the bank's official official account, so they deposited based on their reasonable trust in the channel. They were unable to foresee and understand the internal management chaos and illegal operations of the bank, and were not at fault for the consequences of being unable to withdraw money, It is not reasonable to require them to bear their own losses. According to the authoritative judgment opinions of similar cases in the past, the court also tends to think that the violation of bank staff will not affect the bank's external civil liability. If it cannot be proved that the depositor knows the criminal act, the savings deposit contract is valid.

Even if, to say the least, assuming that the staff member's illegal operation in this case is really his personal behavior and is not instructed by the management of the village bank, as a general depositor, he simply cannot objectively identify it, but deposits the funds based on reasonable trust, and the relevant savings deposit contract is still valid. According to the provisions on apparent agency in the civil code (or the original contract law at the time of contract signing), the relevant staff, as the apparent agent of the village bank, sign the contract externally, which is binding on the village bank. The bank shall be liable to the depositor and pay the principal and interest to the depositor at his request in accordance with the provisions on freedom of withdrawal in the commercial bank law.

As mentioned above, the disputes caused by the "high interest rate deposit solicitation" similar to this case are by no means a minority in the country. Bank staff often collude internally and externally to entice depositors to establish a savings deposit contract relationship with the bank by using the high interest rate deposit solicitation business, thus defrauding the deposit funds, resulting in a dispute over the savings deposit contract between the bank and depositors. In a large number of cases of the same kind, the court tends to hold that the bank's high interest rate does not necessarily lead to the invalidity of the deposit contract.

For example, in the [2014) min Yi Zhong Zi No. 238] civil judgment, the Supreme Court held that although the depositor pan went to Anhui Sixian rural cooperative bank for account opening and deposit business in different places under the temptation of "high interest", pan went through the relevant procedures such as account establishment at the bank's business premises in accordance with the normal procedures; The bank did not provide evidence to prove that Pan knew that the bank's staff members were suspected of criminal acts, and did not actually participate in the above-mentioned criminal acts. Therefore, the court held that the two parties had established a real savings and deposit contract relationship, which was legal and effective. The bank shall pay the principal and interest to the depositor as required.

In terms of Internet deposits, although this function has been concerned by regulators since it was launched, it has been mentioned that the regulatory authorities have successively issued a series of documents to regulate in 2021, such as the notice on regulating commercial banks to carry out personal deposit business through the Internet, the Interim Measures for the management of the sale of wealth management products of wealth management companies, and the measures for the supervision of Internet insurance business, As a result, Internet deposit products have been taken off the shelves, but existing users are not affected. And in judicial practice, there are few precedents that courts deny the validity of savings deposit contracts on the grounds of Internet deposits.

To sum up, even if there are defects such as high interest rate deposit solicitation and illegal Internet deposit, it is not enough to deny the true deposit relationship between the depositor and the bank, and the deposit contract signed by both parties is not invalid. Of course, the court will not order the bank to pay the agreed high interest rate in such cases, but generally calculate the interest based on the interest rate of similar demand deposits in the same period issued by the central bank.

In this case, one of the reasons why the bank refused to withdraw money from the depositor was that the relevant criminal case was still under investigation and it was impossible to distinguish between legal deposits and illegal property. According to this, many depositors believe that even if they sue the court for bank payment, the proceedings will be unable to proceed because criminal cases have priority over civil cases. However, in fact, the civil procedure law stipulates that the lawsuit can only be suspended on the premise that "this case must be based on the trial results of another case, but the other case has not been concluded". Therefore, the so-called "punishment before people" approach is not necessarily applicable to cross criminal and civil cases (that is, Article 130 of the minutes of the nine people's Congress). In fact, in judicial practice, there are a large number of criminal and civil cases of "people first and then punishment". Therefore, in this case, if the depositor appeals to the court to request the bank to lend money, it is not necessarily based on the conclusion of the investigation of the criminal case, especially when the relationship between the creditor's right and the debt is clear, the court may make an advance judgment according to Article 153 of the civil procedure law, ordering the bank to return the depositor's principal.

In addition, according to the provisions of the criminal procedure law, the public security organ may freeze the bank accounts of the suspect as needed during the investigation of a crime, but may not seal up or freeze the property unrelated to the case. However, in practice, citizens' legal property is often frozen by public security organs due to accidental involvement. If the deposit that cannot be withdrawn in this case is indeed frozen due to criminal investigation, the affected depositors can first inquire the bank about the frozen account according to the provisions on banking financial institutions assisting people's procuratorates, public security organs and national security organs to inquire about the freezing, and ask the bank to provide information such as the name of the freezing unit, the start and end date of freezing, the type of freezing and the amount of freezing. If it is innocent, Next, the depositor can inquire the public security organ that issued the freezing procedures to understand the reasons for the freezing, and then, with the help of professionals, issue a detailed written legal opinion to the freezing unit in accordance with the law, and apply for an oral hearing if necessary. If the freezing unit does not agree to unfreeze, it may appeal to the public security organ at the next higher level or to the people's Procuratorate at the same level according to law, or both may be conducted at the same time.

The foregoing has introduced the ways and legal basis that depositors can take to protect their rights in this case. However, in some cases, the depositor's funds may indeed not be recovered. Such situations should arouse great vigilance, and are briefly described as follows:

1. relevant evidence of Internet deposit may be lost if it is not fixed

In this case, many depositors deposited their funds in the village bank involved by means of Internet off-site deposit. Under normal circumstances, the corresponding savings contracts and transfer records are stored on the bank's server in the form of electronic data, and depositors can check them at any time through the bank app or the official website; However, once the app or applet in this case cannot be opened, or the official website shows that it is "under maintenance", the depositor will not be able to obtain relevant evidence to prove the existence of the savings contract and the specific deposit amount, and it will be difficult to claim his rights. Of course, if the relevant transfer is made through a third-party payment platform, the relevant records can be used as evidence; However, in judicial practice, judges tend to think that the credibility and credibility of third-party payment institutions are lower than that of banks, so such evidence may not be accepted by the court.

2. the money may be transferred to a third-party account, so the savings legal relationship cannot be truly established

According to the disclosure of the public security organ, some village bank staff in this case are suspected of illegal fund-raising; In practice, the common operation means of illegal fund raisers is to use the bank's credibility as an endorsement to induce the victim to mistakenly think that he is depositing with the bank. However, the actual counterpart of the contract and the collection account are all third parties, so the legal relationship of savings has not been established, but constitutes a general legal relationship of lending. For example, in the Tuya case exposed in 2011, criminals, together with bank staff, illegally raised 2.737 billion yuan from 83 people in Inner Mongolia, Beijing, Hebei, Henan and other places by means of high interest loans and deceiving victims to deposit. The victims involved in fund-raising thought that their deposits were endorsed by the bank, but the funds were actually transferred into the third-party account controlled by the criminals, which was characterized as private loans rather than deposits. A total of 706.8 million yuan of the victim could not be repaid in this case.

3. if the bankbook, password or u shield are kept by criminals, it will constitute a general private lending relationship

This kind of situation is relatively rare under the Internet deposit mode, but it usually occurs when local depositors deposit at the counter and are familiar with criminals; In view of the fact that some local depositors were also affected in this incident, it will be discussed as one of the possible situations. A typical example of this kind of case is the zhangjuhua case in 2009: after depositing in the bank, the depositor zhangjuhua handed the bank card and U shield to heweihua, the manager of the sub branch's business department, who knew him, who issued a customs declaration with the official seal of the bank business (later proved to be forged). After the deposit of 9million yuan was transferred, zhangjuhua appealed to the court to require the bank to pay the principal and interest of the deposit. The court of second instance held that the depositor should fulfill the obligation of keeping his bank card and u-shield properly. Heweihua's behavior does not constitute a prima facie agent, and the custody note issued by him is not binding on the bank. Zhang Juhua and heweihua form a loan relationship, and the bank is not responsible for no fault.

Most of the depositors affected by this incident may choose to wait. Some depositors have complained to the superior regulatory authorities. However, due to the complexity of the relevant criminal cases, the investigation cycle of the public security organs may be long, and the regulatory authorities may not promise to pay compensation if the cases are not investigated clearly, so it is difficult for depositors to recover their funds in the short term. The author has previously discussed the feasibility of taking legal measures to protect rights in this case. It is suggested that depositors with this intention take precautions and do the following:

1. collect all evidences related to deposits, including wechat, SMS, call records and relevant documents communicated with bank staff, and keep them properly and notarize them as appropriate;

2. under the guidance of professionals, sort out and recheck the whole process of deposit, and clarify the context;

3. formulate a response plan according to the actual situation, or entrust professionals to communicate and negotiate with relevant parties (banks and fund freezing units), or adopt the strategy of "litigation" to promote "negotiation", and protect rights in a variety of ways;

4. in the process, attention should be paid to rational rights protection, and extreme behavior should be avoided.

This incident reflects the urgent need to improve the grassroots financial risk prevention ability. At the same time, there are also many experiences and lessons worth summarizing:

From the perspective of the majority of depositors, in the post financial crisis era impacted by the epidemic, we should be more cautious in choosing savings institutions, and try to deposit in powerful state-owned joint-stock banks; If it is necessary to deposit money in a village bank, considering the upper limit of compensation in the deposit insurance regulations, the total amount of deposits in all accounts of the same depositor in the same bank can be limited to less than 500000 yuan, avoiding putting all eggs in one basket; When saving in the bank, do not glance over the written documents such as contracts and documents, but read the terms as carefully as possible, and ask the bank staff to issue a deposit certificate; Try to reduce the use of third-party network platform deposits and do not believe in the commitment of "high interest for deposits"; At ordinary times, you can pay more attention to the financial and legal professionals to learn relevant knowledge. If necessary, it is recommended to consult professional opinions in time.

From the perspective of financial institutions, this event has further exposed the internal compliance risk of small and medium-sized financial institutions (especially the rural cooperative financial institutions). Relevant financial institutions should speed up the establishment of a sound internal compliance system and strictly implement it; Optimize shareholder structure and internal governance, strengthen personnel management and legal knowledge training; In the context of the current economic cycle, appropriately reduce the asset growth rate and profit expectation, and return to the financial source that serves the local economic development; Professionals can be hired to analyze specific risks when necessary.