Puzzling ICBC breakdown as interest rate surges

One hour outage fuels fears of financial crisis in China.

The Industrial and Commercial Bank of China, the nation’s largest bank, was “paralyzed” for up to an hour on June 23 as a huge interest rate hike ignited fears of a financial crisis.

Thousands of Chinese were unnerved when ICBC’s over-the-counter, automated teller machines, Internet and mobile services went offline in the outage. Online Internet shopping payments, bank card payments to shopping centers, supermarkets, and hospitals were also hit, state media said. The outage hit Beijing and Shanghai, and the provinces of Guangdong, Hubei, Sichuan and Liaoning.

According to official TV, “the paralysis lasted up to 45 minutes,” but online stories indicate that it may have been longer. The sudden halt in service by the largest bank in China—and the largest in the world in market value—was worrying to many.

“Why did China’s largest bank have such a severe breakdown?” asked a post on Twitter.

ICBC had previously made a public announcement on its website that it planned to suspend service from 0:10 am to 1:40 am on June 23 to optimize the system. But media said ICBC branches in Beijing had notices stuck to the glass saying there had been a “malfunction,” and that withdrawing money over the counter or through ATMs was not possible.

A popular theory about the outage was that the bank was tight for money amidst a sharp spike in interbank interest rates or the amount that banks charge each other for lending money.