Bank Made to Refund 100,000 Yuan After Stalling an Early Loan Repayment for Two Months
A Wuhan company wired 18 million yuan to pay off a loan early, but its bank sat on the money for nearly two months citing internal approvals — and kept charging interest. A court has now ordered the bank to return more than 100,000 yuan, a ruling that lands in the middle of China's anxious prepayment wave.
A Chinese company offered to hand its bank 18 million yuan ahead of schedule. The bank's response — wait, we need internal approvals — cost it more than 100,000 yuan in interest and, ultimately, a court judgment against it.
The case, reported by the financial newspaper National Business Daily, centres on a high-tech firm in Wuhan given the pseudonym Xinxin Technology. In October 2023 it signed a credit line of 28 million yuan at 3.4 percent annual interest, drawn down in 16 instalments. With project payments arriving in the second half of 2025, it agreed with the bank to settle the remaining 18 million yuan early. The first early repayment had gone smoothly — funds transferred one day, deducted the next — so the company parked the full amount in its loan account and waited for the deduction.
It never came. The bank's account manager said the early-repayment request was still working through layer after layer of internal approval. Nearly two months passed, the money sat in the account, and interest accrued at the contract rate all the while. The Jianghan District People's Court in Wuhan has now ruled, in a judgment upheld on appeal, that interest charged beyond a reasonable approval window must be refunded in full.
The verdict is trending because it touches a sore national nerve. Millions of Chinese households have spent the past two years trying to prepay their mortgages — cash piling up earns less than a home loan costs — and complaints about banks slow-walking prepayment applications are a recurring grievance. Courts rarely draw the line this explicitly. As one finance commentator put it on Weibo: risk control is legitimate, but "an approval process cannot be a ball of cotton wool with no deadline" (不能把'审批'变成一团没期限的棉花) — the bank should have written down its time limit and run the process, not let the client's money sit while it decided when to collect. The post has been shared widely, and its practical advice is circulating with the ruling: keep your application records, transfer confirmations and correspondence, because the bank will count every day it held your money.
Another commentator flagged the awkward asymmetry borrowers face: under the contract, the extra two months of interest were technically owed, which is why complaint — to the financial regulator's 12378 hotline, he suggested — beats arguing after the fact.
The case was trending on Baidu's board within a day of the judgment's publication. What households watching it will want to know next is whether banks now state a prepayment deadline on the form — or whether the cotton wool simply gets a new wrapper.