2014-03-26T073307Z_1_CBREA2P0KZD00_RTROPTP_2_CHINA-BANKING copyRural banks in China’s eastern city of Yancheng stacked piles of cash in plain view behind teller windows to calm depositors queuing at bank branches for a third straight day on Wednesday following rumors that they had run out of cash. According to residents of Sheyang county, which includes Yancheng, panic began on Monday with a rumor that a branch of one local bank turned down a customer’s request for a 200,000 yuan withdrawal. Banks declined to comment and Reuters was unable to verify the rumor. The affected institutions are tiny compared with the scale of China’s financial sector, and the rush for cash appears to be an isolated incident so far. Rumors also found especially fertile ground there after a failure of less-regulated three rural credit co-operatives last January. Yet the news caught nationwide attention, reflecting growing public anxiety as regulators signal greater tolerance for credit defaults. Miao Dongmei, who runs a baby supply store opposite the branch of the Jiangsu Sheyang Rural Commercial Bank first targeted by depositors said she kept money at the bank, but did not join the stampede. However, she said she had seen other customers carrying baskets full of cash out of the bank branch, while armored cars kept pulling up to deliver fresh loads of currency. Sheyang bank employees told Reuters that some branches had been open 24 hours over the past two days. A visit to one branch showed tellers had stacked bricks of yuan notes immediately behind the glass, piled above head level, and assembled cash piles the size and height of a double bed in the back to show there was enough to go around. More