China Extends Online Finance Crackdown for Filing Purposes

Analysts say the Chinese central bank’s recent announcement that its crackdown on the internet finance sector will continue for the next one to two years signals an extension of the filing period.

“The next one to two years will be spent completing specialist rectification of online financial risk…while simultaneously establishing a regulatory system which is adapted to the unique features of online finance,” said People’s Bank of China vice-governor Pan Gongsheng (潘功胜) at a recent meeting of the Online Financial Risk Specialist Rectification Work Leadership Team (互联网金融风险专项整治工作领导小组).

The statement from PBOC arrived just as regulators stepped up their scrutiny of online lending, toppling nearly 70 online platforms in the past month.

During the two day period of 6 – 7July alone a total of eight online lending platforms were placed under investigation by regulators for using illegal methods to canvas for deposits.

Domestic analysts say PBOC’s recent announcement indicates that they hope to extend the period dedicated to filing work in relation to online finance.

“The one to two years [remark] can be interpreted a a signal that the filing period will be extended…for a maximum of two years and a minimum of one year,” said Xue Hongyan (薛洪言), chair of the Suning Finance Internet Finance Research Center, to Yicai.com.

“The filing extension is an understandable regulatory move,” said Jin Kezhi (金可治), chief risk control officer at Jieyue United.

According to Jin the filing and recording standards for different regions are inconsistent, and the poor performance of filing work has caused multiple problems.

Zeng Jun (曾军), vice-president of Jiedaibao (借贷宝) said that the extension of online loan filing was firstly because the time period given to platforms by regulators was extremely tight, while the ongoing issuance of new policies and regulations in relation to matters such as online asset management and the bank deposit white list has further stepped up filing requirements.

Zeng also points out that the regulatory policies and standards for different regions vary, while the problems suffered by various platforms are unique in character, and new problems have risen as rectification has advanced.

Many online lending platforms still have a huge volume of outstanding non-compliant operations which will be difficult to address in the short-term. The extension of the filing period will give platforms more time to make adjustments to these non-compliant operations.

Related stories

Chinese Central Bank Will Spend Next Two Years Targeting Online Finance Risk

Crackdown on P2P Lenders Spreads to Hangzhou, 10 Platforms Ensnared within a Week

Leave a Reply

Your email address will not be published. Required fields are marked *