Intensive Cleanup of "Dormant Accounts" — Mid-Size Banks Accelerate "Letting Go"

Why Are Small and Medium Banks’ Accounts a Special Focus for Regulatory Upgrades?

China Economic News Reporter Qin Yufang, Guangzhou Report

Recently, many rural commercial banks have issued notices to clean up personal and corporate accounts that meet certain criteria.

Panzhihua Rural Commercial Bank announced that starting March 15, it will begin cleaning up accounts that meet the criteria, and will continue to do so annually. Peixian Rural Commercial Bank’s notice on March 16 stated that accounts with no transactions in the past two years and a balance of 50 yuan (or less) will be cleared. Tonglu Rural Commercial Bank also announced that from May 10, accounts with zero balance, no active transactions for 24 months (or more), and no unsettled interest, loans, wealth management, or withholding business will be closed.

Since March alone, dozens of rural commercial banks and village banks across Jiangsu, Zhejiang, Guangdong, Anhui, Inner Mongolia, Hubei, and other regions have issued account cleanup notices. Many banks have also clarified that they will implement annual cleanups for eligible accounts. Local rural commercial banks and village banks are becoming the main force in this round of “dormant account” cleanup.

Regarding the background of this cleanup effort, Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance, pointed out that regulatory compliance pressures are continuously increasing. In recent years, regulators have strengthened requirements for full lifecycle account management. After the State Financial Regulatory Administration launched a special cleanup of “dormant accounts” in 2023, the scope was further expanded in 2025 to include electronic accounts, mobile banking, and other online channels, with clear obligations for banks to inform customers of risks. He believes that small and medium banks, due to weak account management foundations—such as outdated rural customer information and insufficient identity verification technology—are the focus of regulatory attention.

In addition to regulatory factors, banks’ own cost pressures and operational difficulties are also accelerating cleanup efforts. Fu Yifu, a special researcher at Su Commercial Bank, stated that long-inactive accounts occupy system resources, increase operational and risk control costs, and reduce processing efficiency. Cleaning these accounts can free up computing power and manpower, allowing banks to focus on effective customers. In the context of narrowing interest margins and profit pressure, inefficient accounts lower per-customer revenue. Cleanup helps optimize account structures and improve asset and customer quality.

Furthermore, Fu emphasized that the digital transformation of small and medium banks is underway. With limited online channel resources, removing inactive accounts can provide more stable services for active users, facilitate customer segmentation and targeted marketing, and free up data and operational space. This is a necessary step for cost reduction, efficiency improvement, and quality enhancement.

Meanwhile, Yuan Shuai, an expert at China Economic Media Think Tank and Deputy Director of Investment at the China Urban Development Research Institute, also believes that as state-owned banks accelerate their expansion into county markets, the survival space for small and medium banks is increasingly squeezed. They need to optimize resource allocation by cleaning low-efficiency accounts, redirecting limited manpower and system resources toward high-value customers and profitable business areas.

In fact, small and medium banks face multiple challenges in customer management. Fu further analyzed that these banks currently face three major issues: a high proportion of long-tail customers with high service costs; high-value customers being poached by larger banks, making retention difficult; and data fragmentation leading to broad segmentation and homogeneous marketing.

Yuan Shuai sees this round of cleaning long-inactive accounts as both a necessary response to regulatory compliance and a strategic adjustment driven by business development pressures. “The data obtained from cleaning these low-efficiency accounts can help banks understand local customer habits and asset distribution. Branches can then develop tailored products based on this data to create differentiated local services.”

“While cleaning low-efficiency accounts, small and medium banks should establish a dynamic tiered system, classifying customers by activity, assets, and needs, and implementing differentiated services and access rights. Using the effective data accumulated from cleanup, they can improve customer profiles, identify active and potential customers, and allocate resources to high-value and high-growth segments. Branches can leverage precise data to target local needs, launch suitable products, and avoid price wars and homogeneous competition. Through data feedback, banks can shift from passive operations to proactive management, increasing customer stickiness and per-customer value, thus forming a localized competitive advantage in stock competition,” Fu further stated.

(Edited by: Yang Jingxin, Reviewed by: He Shasha, Proofread by: Wan Ling)