The short answer

  • Whether the bank pays does not turn on whether you did the transaction inside a bank branch, but on two things: whether the money actually entered the bank’s books, and whether the employee’s conduct could on its face count as the bank’s conduct.
  • Where an employee privately promises above-market interest, steers a depositor’s money into an account he controls and then spends it, this is usually found to be a personal crime and not an act performed in the course of employment, and the bank does not pay. The Lei case in the people’s court case database (入库编号 2023-16-2-109-002) reaches exactly this conclusion.
  • Conversely, where the money did enter the bank and the failure was inside the bank — large withdrawals without checking ID, no registration and reporting as required, a forged card not identified — the bank must compensate in proportion to its fault (the Tian case, 2023-16-2-109-001, and the Gu case, 2023-10-2-109-001).
  • The depositor’s own fault directly lowers compensation: trusting above-market interest, handing an ID card and password to the employee, or following the other side through a so-called procedure, will be found to be gross negligence, reducing or even eliminating the bank’s liability (Article 592(2) of the Civil Code of the PRC).
  • A criminal conviction does not mean the money comes back. Recovery and an order to make restitution under Article 64 of the Criminal Law come first; once the money has been spent it often cannot be recovered, so the civil route has to be pursued at the same time.
  • The most effective steps are taken beforehand: deal only at the bank counter, take away a voucher stamped by the bank, and check the balance on the spot using the official mobile banking app or the customer service line. If anyone asks you to move your money to another account, stop.

The facts: RMB 2.2 million belonging to 11 depositors went into the personal account of an employee, Meng

According to public reports, at a Postal Savings Bank of China branch in Zhalantun, Inner Mongolia, from around 2021 about 11 depositors came to the branch to deposit money, and the member of staff who dealt with them was Meng. His line was that the money would be deposited into another account, at interest far higher than the posted rate. Most of the depositors were elderly, and the largest single amount was RMB 750,000. The money ended up in Meng’s personal account — about RMB 2.2 million in total — and was used to repay debts and to spend. Meng was later convicted of the crime of fraud (诈骗罪) and sentenced to 12 years in prison. The depositors then sued the bank for compensation. The first-instance court dismissed all of their claims, on the grounds that Meng had committed a personal crime and not an act performed in the course of employment; that the depositors had been grossly negligent; and that apparent authority (表见代理) was not established, the bank having merely had shortcomings in its management. The case is now in second-instance (appeal) proceedings.

A note: the facts above come from public reports; I have not verified the specific case number or the full text of the judgment, and the second-instance outcome has not been published. What follows discusses the general approach courts take in this kind of case and is not addressed to the final conclusion in that case.

“It was done inside the bank” — why it may still not be the bank’s doing

The depositor’s impression is a direct one: the person was standing in the bank hall, the person who dealt with me was wearing a bank uniform, so how can it not count as the bank’s conduct? Legally it has to be broken into three layers.

  • The contractual relationship: between depositor and bank there is a savings deposit contract, and the bank pays principal and interest against a deposit certificate, passbook or bank card — on the premise that the deposit actually exists. (Articles 6 and 29 of the Law of the PRC on Commercial Banks.)
  • Whether the employee’s conduct counts as the bank’s: the test for agency in the course of employment is acting “within the scope of one’s authority and in the unit’s name” (Article 170 of the Civil Code). A teller taking a deposit at the counter is an act performed in the course of employment; an employee who privately promises above-market interest and steers the money into an account he controls has gone beyond that scope and is ordinarily treated as acting personally. Apparent authority (Article 172 of the Civil Code) requires the depositor to have had reason to believe the other person had authority, and that belief must be reasonable — a promise above the posted interest rate is itself irregular, which is precisely why alarm bells should have rung at the time.
  • The employer’s liability: Article 1191 of the Civil Code provides that where an employee causes harm to another person in the course of performing work tasks, the employer bears tort liability. The key words are again “in the course of performing work tasks”.

The Lei case in the case database (2023-16-2-109-002) is a specimen of this approach: a bank bookkeeper handled a “renewal deposit” for a depositor, in fact withdrew the money and spent it, and covered it up with a forged deposit slip bearing the bank’s business seal. The court found that his conduct was a personal crime rather than an act performed in the course of employment, that the forged slip was invalid, and that the loss was borne by the employee personally, with the bank not paying. The official gist states, in terms: no real deposit relationship existed between the bank and the depositor, and the bank bears no legal liability.

When the bank must pay

By the same logic, where the money did enter the bank and the failure was inside the bank, the conclusion reverses. In the Tian case (2023-16-2-109-001), a criminal group swapped the depositor’s passbook, and more than RMB 620,000 was fraudulently withdrawn in 14 separate transactions. The court found that several banks, when same-day cumulative withdrawals exceeded RMB 50,000, had failed to verify the withdrawer’s identity as required, to register and file the withdrawal, and to report it promptly; this breached the ancillary duty to safeguard depositors’ deposits and withdrawals, they were clearly at fault, and they should compensate in proportion to their fault. The depositor herself had not kept the passbook safely and had not exercised due care, and bore part of the loss herself. The operative part of the judgment simply works out the money item by item according to each bank’s share of fault.

Another category is a bank card being skimmed and used. In the Gu case (2023-10-2-109-001) the approach was: the issuing bank is obliged to identify whether a card is genuine, so if it treats a forged card as the customer’s own and pays from the account, it must compensate; but where the cardholder, after being prompted by the bank, still refused to report the card lost, he too was at fault for the loss that grew as a result, and the loss was shared (Article 592(2) of the Civil Code: where a party’s breach causes loss to the other party and the other party is at fault for the occurrence of the loss, the compensation may be reduced accordingly).

The depositor’s “gross negligence” is the biggest deduction in this kind of case

Handing a bank card, ID card and password to an employee, following the other side to “walk through the procedure”, or transferring funds into an unfamiliar account on his instructions, will all be found to be gross negligence. One detail in the Lei case is worth remembering: after being defrauded, the depositor did not assert a claim against the bank but instead signed a repayment agreement with the employee privately and accepted partial repayment, and the court took this as evidence that she knew it was the employee’s personal conduct. In other words, a private settlement and private payment can well block up your own civil claim. The safer course is to notify the bank in writing and keep the acknowledgment or receipt, and then go through the regulatory complaint and litigation.

If it has already happened, what routes remain

  • The criminal track: report to the police and ask for documentation of case acceptance, and pursue the return of the money through the recovery and order-to-make-restitution procedure under Article 64 of the Criminal Law.
  • The civil track splits in two: one suit against the employee personally (return of property, unjust enrichment or tort); one against the bank, arguing an act performed in the course of employment, apparent authority, or the bank’s own fault. The winning point against the bank is not that the other side is a bank employee, but whether the bank itself was at fault.
  • The order of proof (established in the Yuan case): the depositor first proves that the bank paid a third party who was not entitled to receive, and the bank then argues that the third party was a quasi-possessor of the claim or had apparent authority. On the evidence this comes down to one question: did the money go through the bank’s channel, or into a personal account?
  • The parallel pressure track: complain to the financial regulator about irregular deposit-taking. Luring deposits with above-market interest (高息揽储) is itself a breach of regulatory rules, and the compliance pressure on the bank often produces results faster than litigation.
  • The Deposit Insurance Regulation (《存款保险条例》) does not help here: it covers situations such as a bank being wound up or going bankrupt, with a maximum payout of RMB 500,000; an employee’s misappropriation or fraud is not within its scope.
  • Do not let time run: the limitation period for civil claims is three years (Article 188 of the Civil Code), running from the day you know that your rights have been harmed and who is obliged to you.

A few reminders for taking elderly family members to deposit money at a bank

  • Only ever accept “paid into an account you opened at the bank yourself”. If anyone asks you to move money to another account, however high the interest, stop.
  • Check the balance on the spot using the official mobile banking app or the customer service line; do not wait until you get home.
  • Ask for and keep the deposit voucher; read the payee’s name and the amount, and see whether it bears a bank business seal.
  • Never hand your ID card, bank card, password or SMS verification code to anyone, including people in uniform.
  • If something looks wrong, three steps: call the bank’s official customer service line (and keep the ticket number or text message), report to the police, and preserve evidence (receipts, text messages, call recordings, the branch and counter number, and the time period).

A few common misunderstandings

  • “It was done inside the bank, so the bank has to pay.” — It does not follow; the key question is whether the money entered the bank.
  • “The employee was convicted, so the bank fronts the money.” — It does not follow; criminal recovery and civil compensation are two independent claims.
  • “Everyone in uniform in the bank lobby is a bank employee.” — Not necessarily. Insurance and securities salespeople also sit in bank lobbies; plenty of people go in to make a deposit and come out holding an insurance policy.
  • “You cannot sue without a deposit certificate.” — You can sue, but you must first prove that the deposit exists, which is much harder than having a voucher in hand.

One last reminder: in this kind of case the outcome is almost entirely a matter of evidence, and individual cases differ widely; how to proceed has to be worked out voucher by voucher and transaction by transaction. If you or a family member have had a deposit moved away by a bank employee, or been steered into a non-deposit product, you are welcome to contact Lawyer Wang: telephone 186-0113-9509, WeChat wang223040.

Quick answers

Can depositors sue the bank when money deposited at a branch is taken by a bank employee?
They can, but the outcome turns on whether the money actually entered the bank’s books and whether the employee’s conduct could count as the bank’s conduct. Where an employee privately promised above-market interest and diverted the money into an account he controlled, courts usually treat it as a personal crime rather than an act performed in the course of employment, and the bank does not pay.
When is a bank liable for what its employee did, and when does apparent authority (表见代理) hold?
A teller handling a deposit at the counter is acting in the course of employment. Apparent authority requires the depositor to have had a reasonable belief that the employee had authority; a promise of interest above the posted rate is itself irregular, which is why courts say alarm bells should have rung at the time. And if the money never entered the bank, the bank normally pays nothing.
If the employee is convicted but the money cannot be recovered, what routes remain?
Recovery and an order to make restitution under Article 64 of the Criminal Law come first. In parallel you can sue the employee personally, sue the bank on the basis of the bank’s own fault, and complain to the financial regulator about irregular deposit-taking. Keep an eye on the three-year limitation period under Article 188 of the Civil Code; the Deposit Insurance Regulation does not cover an employee’s misappropriation.

This is an English edition of Wang Xin’s original Chinese article, 去银行存钱，220万进了员工私人账户：储户告银行为什么一审全被驳回？. It explains the law of the People’s Republic of China in general terms and is not legal advice for any particular case; outcomes depend on the specific facts and on how local authorities apply the rules.