It will not be soon for China’s commercial banks, consumer finance service firms and other institutions to see a national regulation governing internet-based lending activities, despite recent progress on specific rules for online peer-to-peer lending and microloans, Caixin learned.
Financial regulators have mulled working out rules for online lending since 2017. Speculation rose late last year that the top banking regulator was drafting broader rules for commercial banks’ internet-based loan business. But Caixin learned that a new regulation still has a long way to go to solve some basic issues such as clearly defining different types of internet-based lending activities and ways to balancing supervision between local and central authorities.
Expectations for the online lending regulation rose recently after progress on new regulations for the P2P sites and microlenders. Caixin reported in early April that a long-expected pilot program for registration of P2P providers in a national monitoring system will start soon this year.
Despite the absence of a national regulation, some local regulators have put rules in place to restrict certain online lending activities. In January, the banking regulator in East China’s Zhejiang province unveiled rules to bar local branches of banks based in the province from granting online loans to clients outside the province when doing so jointly with third parties. It also banned banks from outsourcing essential credit reviews and risk management procedures to online microlenders.