Yes, the state will no longer cover for depositors' deposits in commercial banks and allow banks to go bankrupt. Once a bank goes bankrupt, depositors' deposits will be compensated by deposit insurance institutions, but the compensation will be limited. All banks are allowed to be declared bankrupt by the people's court according to law with the consent of the banking regulatory authority under the State Council after they meet the conditions for bankruptcy.
Legal basis: Article 7 of the Company Law
The debtor may apply to the people's court for reorganization, reconciliation or bankruptcy liquidation under the circumstances specified in Article 2 of this Law. If the debtor is unable to pay off its due debts, the creditor may apply to the people's court for reorganization or bankruptcy liquidation of the debtor. If an enterprise as a legal person has been dissolved but has not been liquidated or has not completed liquidation, and its assets are insufficient to pay off its debts, the person who is legally responsible for liquidation shall apply to the people's court for bankruptcy liquidation.
