China’s top Internet platforms have removed their online deposit products following far heavier scrutiny from regulators concerned about risk issues.
As of 20 December Alipay, Du Xiaoman Financial, JD.com and Tencent Wealth Management have suspended the sale of online deposit products via their financial apps, according to a report from Diyi Caijing.
JD.com said to the publication that it had suspended the addition of new online deposit products or the sale of related products to new customers, in response to the attention that China’s regulatory authorities are giving to online deposit operations.
Deposit products already sold by JD.com to customers will remain unaffected, while JD.com will in future “closely monitor the relevant regulatory policies and guidance opinions.”
Ant Group said on 18 December that the removal of online deposit products from its Alipay platform came in response to demands from Chinese regulators, and that products already purchased by clients will not be affected.
The removal of online deposit products by China’s biggest fintech platforms comes following efforts by authorities to tighten regulation of the Internet finance sector.
On 2 November the Chinese central bank and the China Banking and Insurance Regulatory Commission (CBIRC) jointly issued the draft version of the “Online Micro-loan Operations Provisional Administrative Measures” (网络小额贷款业务管理暂行办法（征求意见稿）), which impose far tighter restrictions on online lending operations.
Analysts say the move was a key factor behind the shelving of Ant Group’s Shanghai and Hong Kong IPO that was originally scheduled for 5 November, and set to raise a record-breaking sum of USD$34.4 billion.
Sun Tianqi (孙天琦), head of the Chinese central bank’s financial stability department, said that when Internet finance platforms engage in certain types of financial operations such as online deposit acceptance, this is categorised as “illegal financial activity” and is the same as “driving without a license.”
Sun made the remarks on 15 December at the 4th China Internet Finance Forum.