China’s financial authorities have reiterated their crackdown on P2P lending platforms following a wave of fraud scandals that rocked the sector last decade.
The China Banking and Insurance Regulatory Commission (CBIRC) said that it would “continue to drive the development of long-term mechanisms for the regulation of P2P online lending risk,” as well as “uphold the requirement that all financial operations must be licensed, strictly ban suspended organisations from undertaking new P2P lending operations, and strictly ban the addition of any similar organisations.”
CBIRC made the remarks last week at the 2022 meeting of the P2P Online Lending Risk Specialist Rectification Work Leadership Team (P2P网络借贷风险专项整治工作领导小组).
As of the end of 2021 the number of online lending organisations with outstanding P2P operations had fallen to 1169, for a decline of 297 compared to the start of the year.
The unpaid balance had fallen to 497.4 billion yuan, for a decline of 323.3 billion yuan compared to the start of 2021.
Requirements made by the meeting include:
- Continue to shore up the responsibilities of platforms, shareholders and senior management, and intensify supervision and management of key P2P online lending platforms.
- Raise the efficiency of case handling and review. Apply “sunshine handling” of cases, and strictly pursue liability for inappropriate profits including senior management bonuses, shareholder dividends and fees for celebrity spokespeople.
- Employ diversified resolution of disputes in relation to online platforms, and further make use of the role of judicial institutions in striking against malicious avoidance of responsibility.
- Fully uphold the legal rights and interests of lenders.
- Continue to drive the development of long-term effective regulatory mechanisms for P2P online lending risk.
