China’s financial regulators have prohibited domestic banks from offering popular Labubu collectible dolls as incentives to attract new depositors, marking a significant intervention in the increasingly competitive banking sector. The ban, announced on June 12, 2025, targets promotional campaigns that use gifts to lure customers, as banks grapple with declining profit margins and intense competition for deposits amid challenging economic conditions.
The Zhejiang branch of China’s National Financial Regulatory Administration (NFRA) issued a directive urging local banks to refrain from offering non-compliant perks, such as the trendy Labubu dolls, to attract deposits. This action was in direct response to a campaign by Ping An Bank, which had been enticing new customers with Labubu collectibles in exchange for depositing at least 50,000 yuan ($6,960) for three months.
The regulatory move builds on a 2018 rule prohibiting commercial banks from attracting deposits through “inappropriate means,” such as giving away physical gifts or cash returns. The NFRA has called for the immediate suspension of any products tied to non-compliant deposit-gathering practices and the removal of related promotional materials.
Chinese banks are navigating a precarious landscape, balancing the need to attract deposits while protecting their razor-thin profit margins. In May 2025, major banks implemented another round of deposit rate cuts, with smaller institutions following suit, pushing term deposit interest rates to just above 1%. This has intensified competition for deposits as banks face declining loan growth, compressed interest margins, and demographic challenges, including an aging population and a shrinking customer base.
Retail banks, in particular, are struggling to attract and retain younger customers amid low interest rates and a declining number of retail banking clients, exacerbated by China’s decreasing and aging population.
At the center of this regulatory action is the Labubu doll, a collectible that has become a global sensation, particularly among Gen Z consumers. Created by Hong Kong artist Kasing Lung and sold primarily by Chinese toy company Pop Mart, these monster-like figurines—featuring pointed ears, sharp teeth, and mischievous grins—typically retail for 50-99 yuan in official stores.
However, their scarcity and celebrity endorsements have driven prices significantly higher on secondary markets. The dolls’ popularity soared after Lisa from the K-pop group Blackpink was spotted with them and praised them in interviews. Other global celebrities, including Rihanna, Dua Lipa, and David Beckham, have also been photographed with the collectibles, further fueling demand.
In June 2025, a human-sized Labubu doll sold for a record-breaking 1.08 million yuan ($150,000) at a Beijing auction organized by Yongle International Auction, which featured 48 Labubu items and generated 3.73 million yuan in total sales.
Recently, China’s central bank reduced benchmark interest rates—the first cut since October of the previous year—and lowered deposit rate ceilings to bolster banks’ profitability, as detailed by Bloomberg. These measures underscore the strain felt by financial institutions as declining interest rates squeeze margins. The use of costly gifts like Labubu dolls had become a desperate bid to attract depositors, but regulators now view such strategies as unsustainable.
A post by thinking_panda, citing The Guardian, noted, “
Chinese authorities have banned domestic banks from luring customers with gifts including the hugely popular Labubu dolls, amid fierce competition among lenders as interest rates and profit margins decline.”
In their quest to attract depositors, banks like Ping An Bank turned to Labubu dolls as a creative marketing tool. The bank’s promotion went viral on Chinese social media platform Xiaohongshu (RedNote), generating significant interest from potential savers. However, the campaign drew criticism from state media, which described it as “not a long-term solution” for customer acquisition.
Ping An Bank defended the initiative as a small-scale project launched by a local branch but declined to comment further when contacted by the media. The strategy highlights the lengths to which financial institutions are going to differentiate themselves while navigating regulatory restrictions on interest rate subsidies and anti-competitive practices.
The ban on using Labubu dolls and similar gifts reflects regulators’ growing concerns about banks driving up operational costs and further eroding their already compressed profit margins. Such promotional tactics—often involving items like rice, small home appliances, or online platform memberships—are viewed as unsustainable and potentially destabilizing for the banking sector.
The NFRA, established in May 2023 to oversee China’s $58 trillion banking and insurance sectors, has been actively working to maintain financial stability amid economic headwinds. This latest action underscores the delicate balance authorities are trying to strike: allowing banks to compete for deposits while preventing practices that could undermine the sector’s financial health.