The central government’s top financial regulators have launched investigations into some of China’s leading online lending platforms in the wake of police raids of Hong Kong-listed fintech company 51 Credit Card.
The People’s Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) have assembled an investigation team that will look at issues in relation to online lending including big data usage and gathering, as well as the use of debt collection outsourcing agencies, according to a source who spoke to 21st Century Business Herald on 24 October.
The investigation will also cover cooperation between internet companies and banks, trust companies or consumer finance companies as part of arrangements to channel funds provided by the latter.
The initial group of companies targeted by the investigation will include New Third Board-listed firms Yi’nuo Yinhua (一诺银华), Wansheng Jinrong (万盛金融) and Ping An Group subsidiary Ping An Puhui (平安普惠).
The investigation arrives just following police raids on the headquarters of 51 Credit Card in the Zhejiang province capital of Hangzhou, prompted by allegations that the company had made use of debt collection agencies employing illegal methods such as verbal degradation and harassment.
Beijing municipality also flagged stricter regulation of fintech companies earlier this month, with the launch of new measures on 12 October that place strict curbs on cooperation between fintech platforms and banks.