Rumor: China's Banking Regulator to Consolidate Micro Lending Industry
International Financial News, 11/22/17
The Financial Stability and Growth Committee of China's State Council, the country's cabinet, has instructed the China Banking Regulatory Commission (CBRC) to clean up and rectify the online lending market, according to an industry insider cited by International Financial News. Regarding the cash lending business, the CBRC will:
1. Stop issuing new licenses for online small volume loans. Currently, 157 companies hold such a license.
2. Thoroughly investigate and clean up companies whose equity is held by state-owned assets or who applied for the license under the name of a state-owned enterprise.
3. Pay extra attention to licensed organizations which have had changes to their equity structure within the last year, and order short-term rectification of organizations which are no longer in compliance.
4. After the clean-up, there will only be two types of licensed organizations: large state-owned enterprises (preferably with a financial background) and large internet entities (such as Ant Financial, the financial services affiliate of Alibaba Group (NYSE: BABA), B2C e-commerce platform JD.com (Nasdaq: JD), and Baidu (Nasdaq: BIDU)). One group can only hold a single license.
5. Small debt is not to be packaged as assets for sale on trading platforms or securitized in any other fashion.
Keywords: Internet China Banking Regulatory Commission State Council financial services online lending regulation
Sending
