Kangwon Province banks have recently offered new savings products as part of efforts to collect “idle cash” from the general public. Although customers can withdraw money anytime and earn relatively high interest on their savings, most people remain skeptical as they have minimal trust in the country’s banks.
Speaking on condition of anonymity due to security reasons, a Daily NK source in Kangwon Province said Thursday that bank branches in Wonsan and elsewhere in the province were ordered on Oct. 20 to “raise quarterly interest on savings and ensure that the people can withdraw the money they’ve deposited at any time.”
The source said that bank branches are responding by offering new long-term and short-term savings products. Interest rates differ slightly from branch to branch, between 4% and 9%, and contracts explicitly say customers can “close their accounts at any time.”
“Subscribers can choose periods between one and 10 years. When the period ends, they can collect their deposit and interest. And they can close their account anytime, even before the period ends, and their initial principle is guaranteed,” the source said.
Contracts for existing bank products were signed by a bank clerk only, but contracts for new products are signed by bank branch managers.
“This means the bank will take responsibility at every step,” the source said. “The aim is to boost the people’s confidence in the banks.”
Ultimately, the order appears aimed at expanding the cash reserves at local banks by boosting people’s confidence in financial institutions to suck up their idle cash.
Agencies and enterprises in Kangwon Province regularly encourage people to sign up for savings products, with some workplaces even semi-strongarming their employees to join.
“District offices sometimes force retirees to save KPW 500 of their pension payments at the banks, or the financial departments of enterprises force workers to save KPW 850 from their paychecks,” the source said.
Many people without any incomes have answered the government’s call to open savings accounts, depositing sums of varying amounts at banks, starting from KPW 150.
“The province must be really hard-up for cash to do something like this,” the source said. “Banks are firmly guaranteeing that people can retrieve their savings, so people are depositing at least a little money, even at the risk of being scammed again. Still, almost no one completely trusts the banks.”
Translated by David Black. Edited by Robert Lauler.
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