Stricter regulations are intended to limit abuses, improve government oversight and allow the entry of foreign enterprises for the first time. But, a more comprehensive framework is needed to manage systemic risk posed by the sector’s rise.
The Chinese government has allowed unregulated online participants to innovate and grow in a sector traditionally dominated by state banks. Systemic risk has increased by not imposing strict and comprehensive regulatory regimes.
Central bank guidance indicates a willingness to be more flexible on lending caps, as economy starts to cool and is threatened by a trade war with the US.
World First Asia subsidiary Yuefan Business Consulting would become the first foreign-funded third-party payment institution in China if its licence is approved.
Kayou Payment Services and Free Me Pay were ordered to exit merchant acquisition business and to pay penalties totaling $5mn for violating payment and settlement rules.
New regulations require overseas financial network and information services providers such as SWIFT to submit written reports to the PBOC.
Agricultural Bank of China has issued a ¥2mn loan backed by farmland from a Guizhou province branch; new system speeds up loan issuances and prevents fraud.
Ministry of Commerce consultation paper proposes to reduce lock-in period from three years to one and to reduce ownership and asset management thresholds.
Yang Jiacai, found guilty of accepting bribes worth ¥23mn and withholding information about ¥31.16bn in income and property, was sentenced to 16 years in prison and fined ¥2mn.
Central government efforts to reduce excess capacity has put pressure on local economies and firms’ ability to repay debt; thirteen banks have had their credit ratings cut or outlooks downgraded, according to analysis by Reuters.