In the eyes of many people, banking is the most profitable industry, and it is impossible to go bankrupt. However, in fact, with the exception of the six major state-owned banks and dozens of joint-stock banks, more than 90 percent of the small and medium-sized banks have to face fierce market competition and are on the verge of profit and loss. Therefore, bankruptcy and bankruptcy are inevitable.
After entering December, there were media reports that the two banks announced their dissolution. They are: Gaocheng Hengsheng Village Bank and Jinju Hengsheng Village Bank. Since the beginning of this year, eight village and township banks have been approved for bankruptcy. If you add in these two dissolved banks, there are 10 village and township banks that have failed.
As a matter of fact, there are many reasons for the bankruptcy and collapse of village and township banks, and the main reasons are as follows: First, now that the mainland has liberalized its financial licenses, various types of banks have sprung up like mushrooms. As a result, competition among the industry has become increasingly fierce, and there will always be some village and township banks that have gone bankrupt due to poor management. Like the Gaocheng Hengsheng Village Bank and Jinju Hengsheng Village Bank mentioned earlier, they collapsed due to poor management.
In addition, the major shareholders of some village and township banks illegally misappropriated the bank's funds for investment in other areas, and as a result, the funds were never returned due to the failure of the investment. Under such circumstances, the village or township bank can no longer operate and can only be declared bankrupt or dissolved.
Second, high-interest deposits. Many village and township banks adopt the method of collecting deposits at high interest rates to absorb depositors' deposits. However, high interest rates will also force banks to invest their funds in high-risk projects in order to obtain a higher return on investment. And once these high-risk projects fail, it is often difficult for banks to recover their investment. In the end, the village and township banks could only declare bankruptcy due to the rupture of the capital chain.
Third, the on-balance sheet business is off-balance-sheet. In order to obtain higher investment returns, some small and medium-sized banks have tried every means to evade the financial supervision of the relevant departments and turn their on-balance sheet business off-balance-sheet, so that they can escape the supervision of the regulatory authorities. After breaking away from financial supervision, small and medium-sized banks are likely to have a large number of bad debts. As a result, the liquidity of small and medium-sized banks will dry up, and bankruptcy and collapse will be inevitable.
Now the question arises: In the future, more and more small and medium-sized banks will declare bankruptcy and collapse, what should depositors do? If your deposit in this bankrupt bank is less than 500,000 yuan, as long as the bank participates in deposit insurance, even if the bank declares bankruptcy and collapses, the safety of depositors' deposits will certainly be fully compensated.
If the depositor's deposit exceeds 500,000 yuan, the excess part of the deposit will be compensated according to a certain proportion after the bank's assets are liquidated. In this case, depositors who have more than 500,000 deposits may suffer losses. However, judging from the situation of Baoshang Bank, which declared bankruptcy in August 2020, all depositors have received full compensation for their deposits.
Of course, in the face of more and more small and medium-sized banks going bankrupt and failing in the future, depositors should also take some countermeasures: first, when depositors deposit money in the bank, they should see whether the bank has the sign of deposit insurance, and if there is, they can boldly deposit, as long as the deposit is less than 500,000 yuan, they can get full compensation;
In addition, it is better for depositors to deposit their money in the six major state-owned banks, because it is impossible for the state-owned banks to go bankrupt and fail, and their deposits will be safeguarded. Of course, if you covet the interest on deposits of small and medium-sized banks, you can also deposit money in small and medium-sized banks, but the deposits should be controlled within 500,000 yuan.
Finally, instead of keeping all your deposits in one bank, you should spread your money across several banks. For example, if you have a deposit of 2 million, don't be afraid of trouble, you can deposit the money into 5 banks separately. And this way of depositing is even safer.