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Doris Yu · · 1 min readChina’s new rules tighten requirements for banks’ online lending businesses
“China’s bank regulator on Saturday tightened requirements on the internet loan business of commercial banks, amid heightened scrutiny of online lending by internet giants such as Ant Group, the finance arm of Alibaba Group Holding,” reported Reuters.
Details:
- Commercial banks must now issue internet loans with a partner, with no less than 30% of the total capital coming from the partner, according to the China Banking and Insurance Regulatory Commission.
- The internet loans issued by the bank and its partner should also not surpass 25% of the bank’s net tier-one capital, as well as 50% of its total balance.
Context:
- According to the new rules, which the regulator said will be in effect starting on July 17, 2022, tech platforms such as Ant Group will need more capital for their online lending services.
- Ant Group’s US$37 billion dual listing was suspended in November last year due to regulatory issues.
Editing by Collin Furtado and September Grace Mahino
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