The CBIRC said it will continue to pursue now-closed P2P lending platforms as well as their owners and executives through the court system for losses suffered by investors.
The CBIRC (China Banking and Insurance Regulatory Commission) has provided an update on its P2P lending crackdown, pledging to continue to pursue those responsible for investor losses in the sector.
At its peak, P2P lenders had issued over CNY 150 billion in loans using funds raised from some 50 million investors. Following a crackdown on fraud in the sector, about 5,900 P2P lenders were closed by end-2020. However, many of the investors in the now-defunct P2P platforms have struggled to recover their funds.
In remarks made during a video conference with P2P lending risk specialists, the CBIRC said the focus of “rectification work” in the P2P sector has shifted to the disposal of existing risks and the establishment of “long-term mechanisms”.
According to the regulator, the total amount of closed P2P lending firms with outstanding business reduced from 1,466 to 1,169 over the course of 2021. Unpaid balances fell to CNY 497.4 billion, down from about CNY 820 billion at the start of 2021.
The CBIRC emphasised the need to “aggressively promote” the rectification of outstanding P2P loans, safeguard the rights and interests of the people, and stabilise the overall “social situation”.
In 2020, groups of P2P investors were convening on popular social media platforms to discuss the lack of progress by authorities to help them recover their funds. These social media groups were regularly being censored, reportedly to prevent investors from gathering to protest.
During the video conference, the CBIRC said it will continue to consolidate the responsibilities of P2P platforms, their owners and executives; improve the efficiency of case investigations and trials; and pursue “unjust enrichment” through mechanisms such as executive bonuses, shareholder dividends, and celebrity endorsement fees.
The CBIRC said it will work to resolve disputes involvign P2P loan platforms, including by using the court system to crack down on “malicious evasion of debts” and promote the orderly resolution of cases.