Source: Sina Finance.
On 31 December, according to the China Banking and Insurance Regulatory Commission’s website, the head of a relevant CBIRC department said in answering media questions that the recent repeated summoning of Ant Group by four central financial regulatory departments and the publication of its key content highlighted outstanding problems and rectification requirements that are not only specific but also have a certain universality. All internet platforms are advised to self-inspect accordingly and rectify early. Institutions involved in online microlending, insurance, wealth management, trust and other such businesses in particular should hurry; regulators will arrange inspections afterwards.
The official emphasised four points: first, financial innovation must proceed under the premise of prudent regulation. Second, regulation must be strictly implemented. All financial activities must be brought under regulation fully and according to law, operated with licences, and regulatory arbitrage through violations firmly stopped. There can be a transition period, but the general direction will not change. Third, all types of entities are treated equally. Fourth, financial stability and financial security must be effectively safeguarded: handle the relationship between financial development, financial stability and financial security well, ensure financial innovation proceeds under prudent regulation, and firmly hold the bottom line against systemic risk.
The CBIRC also noted that fintech regulation must adhere to the principle of lawfulness and compliance, carry forward the spirit of the rule of law, improve the regulatory system, fill institutional gaps, keep adapting to the trend of financial digital transformation, and make regulatory measures more targeted, applicable and operable.
In addition, the official revealed that the general principles and direction of the Interim Measures for the Administration of Online Microloan Business (draft for comment) are basically settled, and the Measures will be revised and refined according to the comments received before being released in due course.
Online microloan institutions should self-inspect and rectify according to the Measures’ overall requirements and spirit. First, self-examine and correct violations: problems found in self-inspection must be actively corrected and handled strictly according to relevant laws, regulations and requirements. Second, standardise and rectify business: conduct loan facilitation and joint lending as required, observe the capital contribution ratio requirements, forbid inducing borrowers into excessive debt and multi-platform borrowing, raise funds externally lawfully and keep financing leverage within a reasonable range. Third, manage intensity and pace: new business follows the new Measures and their spirit, while existing business is rectified steadily and in order. Fourth, protect consumers’ lawful rights: do not raise customers’ financing costs, do not lower service quality or standards, and support the development of the real economy.
On the recent delisting of banks’ internet deposit products from internet platforms, the official said the CBIRC supports commercial banks developing online deposit business under prudent operation and controllable risk, following these principles and requirements: first, lawfulness and compliance; second, strengthened risk management; third, protecting consumers’ lawful rights. When conducting deposit business, commercial banks should strengthen sales management and not infringe consumers’ right to know and right to independent choice.
The official also said that recently the CBIRC, together with the People’s Bank of China, has drafted a normative document regulating commercial banks’ personal deposit business conducted over the internet, following the approach of problem orientation, orderly standardisation and risk prevention and control, to promote the business’s steady, healthy development; relevant information will be released to the public in due course.
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