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Steps to tackle fintech risks get more impetus

By Chen Jia in Tianjin | China Daily | Updated: 2017-12-09 09:53
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Pan Gongsheng, deputy governor of the PBOC. [Photo/VCG]

China will push forward the special campaign on tackling risks in internet finance or the fintech sector, to launch a system focusing on financial conduct and prudential regulation, as well as build the market access mechanism, according to a central bank deputy governor.

The move is based on a principle raised by the country's top financial regulators-there is no exception of any new types of financial business that can bypass the regulatory framework, and the final target is to boost the real economy, Pan Gongsheng, deputy governor of the People's Bank of China, said at a forum in Tianjin on Friday.

Pan said the next step to enhance internet finance regulation will take advantage of technology development and improve credit information disclosure and sharing, based on the building of infrastructure and financial statistics systems, to protect and educate investors.

The special campaign, which started in April 2016, has seen "primary achievements", said Pan.

The National Internet Finance Association of China launched a nationwide internet finance monitoring center, an internet finance big data center and an internet finance standard testing and certification center in Tianjin Pilot Free Trade Zone on Friday, as the major infrastructure overseeing the country's fast growing fintech companies.

A new function of the NIFA's registration and information disclosure platform was also launched on the same day that records financial services contracts of online-lending companies, covering information of the loans' purpose, the term of borrowing, and borrowers' personal status.

On the platform, as of today, 112 internet finance companies have disclosed their business and operational information.

The association said the function will help to decrease asymmetric information between lenders and borrowers, to help investors make rational decisions and reduce default risks.

Li Dongrong, chairman of the association, said that safety concerns should overwhelm financial innovation in the development of fintech, while regulators should not neglect the possible lagging risk exposure.

A set of systems for statistics monitoring, risk pre-warning and credit information sharing are under preparation, which will facilitate a long-term and sustainable development of the new types of financial business by tightening regulation, said Lu Shuchun, the association's secretary-general.

A personal credit information platform, which is called "credit union", with NIFA as the largest stakeholder of 36 percent shares, is expected to open by the end of this year, to serve online lending companies by rating personal credit status and share legal information for supervision, according to an official from NIFA.

The platform will also rope in the other eight third-party credit service agencies as joint stake holders.

Last week, China's central bank and the China Banking Regulatory Commission jointly released a notice that bans unlicensed firms or individuals from carrying out lending business. The regulator has also suspended new approvals of online micro-lenders and cross-region lending.

According to the official statement, borrowing costs of private lending should be no higher than 36 percent annually, or it will be identified as usury stipulated by the Supreme People's Court.

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