Chinese Central Bank on Verge of Launching Second Generation Credit System


The People’s Bank of China (PBOC) is preparing the imminent launch of the second generation version of its online credit system, which will be expanded to encompass a greater range of information as well as financial institutions.

Several sources said to 21st Century Business Herald that the Chinese central bank commenced trial operation of the second generation credit system in October last year, with over 10 institutions including banks, consumer finance companies and brokerages taking part in the scheme.

“We’ve already connected (with the central bank’s credit system), and commenced trial operation in March of this year,” said one risk control officer at a major Chinese commercial bank.

PBOC will commence use of the second generation credit system for inquiry purposes with other banking sector financial institutions by as early as May, with the two systems set to temporarily run concurrently.

After the uploading of report data to the second generation credit system commences, PBOC plans to eventually suspend inquiries with and submissions to the first generation system at an opportune time.

The second generation system will cover information that was not included by the first generation credit system, including revolving loans, large-sum specialist installments for credit cards, joint borrowers, companies providing guarantees to individual persons, individual persons providing guarantees to companies, and late repayment information.

“The second generation system will make major adjustments in terms of systems structures, operating models, data gathering standards, technical integration standards and product service frameworks, and resolve a large number of the omission issues with the first generation credit system,” said Liu Zhibing (刘志兵), chair of DeeLon.

Liu expects an increasing number of non-bank institutions to be connected to the system in future.

“The second generation credit system’s integration trials are at present primarily directed at banking institution openness, and the timetable for non-bank trial integration remains unclear,” said Liu.

“Work still waits for the integration of a greater number of non-bank institutions into PBOC’s second generation credit system.”

PBOC officials say that as of 31 July 2018 the central bank credit system has collected information on around 970 million natural persons following over a decade of operation, as well as information on 25.38 million enterprises and other institutions.

Sources in the credit sector say that there are over 3000 institutions connected to China’s central bank credit system, including banks, trusts and consumer finance platforms.

Following the switch to the second generation system, PBOC is expected to also include micro loan companies, financial leasing companies, financial guarantee companies and commercial factoring companies.