BEIJING (REUTERS) - A former financial regulation official in central China's Henan province is under investigation following a local rural banking scandal, the local anti-graft watchdog said on Friday (Aug 2).

Mr Chen Yimin, former deputy head of the now-defunct China Banking Regulatory Commission's Henan Office, is being investigated for suspected "severe violation of discipline and law", the watchdog said in a statement on its website.

Mr Chen, who worked at the Henan Rural Credit Union from 2012 to 2018, is the latest of a string of Henan financial officials to be placed under investigation.

Since April, deposits worth at least US$1.5 billion (S$2.10 billion) at a handful of small lenders in Henan have been frozen in what authorities have said was a complex scam that has sparked protests and threatened public confidence in the country's financial system.

Henan authorities have started repaying depositors in rural banks since July.

Last month, local police said they have arrested 234 suspects in connection with the scandal.