Chinese regulator finalizes guidelines for banks’ internet lending activities
SHANGHAI (Reuters) – China’s banking regulator on Saturday tightened requirements for commercial banks’ internet lending activities, amid heightened oversight of online lending by internet giants such as the branch’s Ant Group Co. Financial Services of Alibaba Group Holding Ltd.
Commercial banks must jointly contribute funds to issue Internet loans with a partner, and the proportion of the partner’s capital in a loan should not be less than 30%, the China Banking and Insurance Regulatory Commission said in a statement. notice.
The balance of internet loans issued by a bank with a partner, including its related parties, should not exceed 25% of the bank’s senior net equity, he said.
In addition, the balance of Internet loans issued jointly by commercial banks and cooperative institutions cannot exceed 50% of the total bank balance, the guidelines say. In a separate question-and-answer document, the regulator said businesses must comply with the new rules by July 17, 2022.
The regulation will increase the potential capital needs of technology platforms such as Ant Group, which was set to raise $ 37 billion in an IPO based on its vast array of online lending services.
Those hopes were dashed when Chinese regulators intervened to suspend listing in November, fearing that overindebtedness of consumers posed a threat to the country’s financial system.
Reporting by Josh Horwitz and Jing Wang in Shanghai and Cheng Leng in Beijing; Editing by William Mallard and Ros Russell