Chinese regulators continue to target risk in the online lending sector with the unveiling of an updated draft version of measures that cover the internet lending activities of commercial banks.
The China Banking and Insurance Regulatory Commission (CBIRC) has just released the “Commercial Banking Internet Lending Provisional Regulatory Measures” (商业银行互联网贷款管理暂行办法), following the release of an earlier draft version in November 2018.
The new draft Measures call for commercial banks in China to centralise operation and management of their online lending activities, and include online loan operations within their comprehensive risk management systems.
Chinese banks are now required to establish risk management systems, internal control mechanisms, internet information systems and security protection systems that are suited to online lending operations, as well as effectively identify, assess, monitor and control online loan business risk.
Banks must further ensure that their risk preferences, risk management systems, and risk management capabilities match their online loan growth plans, actual rates of growth and business scopes.
Where their online lending models involve cooperation with external organisations, core risk control must be independently undertaken by Chinese commercial banks.
Third-party cooperating organisations cannot be entrusted with credit approvals, risk control, loan issuance, payment management, post-loan management or other core operation segments.