Reuters: Oddly Enough: China central bank office mobbed by borrowers seeking free loans

Reuters: Oddly Enough Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

China central bank office mobbed by borrowers seeking free loans Jul 11th 2013, 09:43 BEIJING | Thu Jul 11, 2013 5:43am EDT BEIJING (Reuters) - About 1,000 hopeful borrowers overran a branch of China's central bank as a rumor spread that it was handing out zero-interest loans, media said on Thursday, illustrating how Chinese financial know-how badly lags growth in banking products. Police were called in on Tuesday to disperse the crowd, which had gathered for days outside the central bank in Beihai in the southern province of Guangxi, the Global Times said. The rumor had spread that the People's Bank of China was distributing interest-free loans of between 50,000 yuan ($8,200) and 500,000 yuan. "The People's Bank of China is a national financial regulator and does not extend deposit or lending services to individuals," Luo Daofang, the deputy head of the Beihai office, was quoted by Beihai television as saying. The Beihai city government was not available for comment, and the central bank declined to comment when contacted. As China frees up its financial markets, authorities must step up education of financial products, said Zhang Zhiwei, an economist at Nomura in Hong Kong. "I worry more about investors buying wealth management products, thinking that these are risk-free, and finding out later down the road that they are not," Zhang said. Growth in China's wealth management industry has exploded in the last three years as savers search for alternatives outside low-yielding bank deposits. Sales rose by 12.1 trillion yuan in the first six months of 2012. ($1 = 6.1341 yuan) (Reporting by Koh Gui Qing; Editing by Nick Macfie) Link this Share this Digg this Email Reprints

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