Cases in which clients' bank deposits have disappeared have triggered a call for Chinese banks to strengthen internal management and for depositors to be wary of interest rates that are much higher than benchmark figures.

In several widely reported cases, criminals colluded with bank clerks or executives.

They lured clients with high deposit rates, provided them with false information and later transferred the clients' money to criminals' accounts.

Zhao Xijun, deputy dean of the School of Finance at Renmin University of China, said, "Banks must improve supervision of their operations to prevent their clerks from doing illegal business while keeping other people in the dark."

The cases reported include the embezzlement of 95.05 million yuan ($15.26 million) from 42 depositors at a rural commercial bank in Hangzhou, Zhejiang province.

Banking researchers said deposits are also being invested increasingly in financial products with high returns and high risks.

Guo Tianyong, director of the Research Center of the Chinese Banking Industry at the Central University of Finance and Economics in Beijing, said, "In some cases, bank clerks did not enter a deposit into a client's bank account.

"They transferred it to another account to offer loans at extortionate rates of interest without telling the depositor where the money really went. Bank defaults occurred when the loans turned sour."

As the Chinese economy slows, similar defaults may continue, because many deposit contracts with high interest rates have not yet matured, Guo said.

Small and medium-sized banks are more likely to have such problems, he said. Compared with large commercial banks, they are more willing to offer high interest rates to attract deposits.

Wu Qing, deputy director of banking research at the Development Research Center of the State Council, said, "In some cases, bank clerks did not tell clients their deposits had been turned into entrusted loans organized by an agent bank between borrowers and lenders.

"In some other cases, clients connived with bank clerks to earn higher profits with their money, believing that banks would cover their losses even if defaults occurred."

If a bank or senior bank executive induces clients to make deposits for high returns through fraud by withholding information from the clients, the bank should take full or joint responsibility for deposit losses, Wu said.

Wen Bin, principal researcher at China Minsheng Banking Corp, said banks are striving to prevent "moral hazards" by introducing double-checking in their business processes with the help of information technology.

Clients, on the other hand, should increase their risk awareness and learn the basics of investing and personal finance, Wen said.

Pan Gongsheng, deputy governor of China's central bank, said at a news conference on Friday, "The People's Bank of China and the China Banking Regulatory Commission will urge commercial banks to further strengthen their internal control and risk management.

"Cases of missing deposits should never happen again."