An official at a branch of China’s central bank was placed under investigation for “suspected severe illegal and violation activities,” the Central Commission for Discipline Inspection said Thursday.
The anti-graft body didn’t disclose the specific reasons for the investigation of Chen Zhiyang, an official of the payment settlement office at the People’s Bank of China (PBOC) Shenyang branch. But it may be related to a recent probe of several other former PBOC officials in a two-year campaign to tighten oversight of the country’s third -party payment industry, people close to the matter suggested.
In November, Yang Biao, former deputy director of the financial services department at the central bank’s Shanghai office, was investigated for “serious violations of law.” Multiple industry sources close to Yang told Caixin they suspected it was related to corruption in handling third-party payment licenses. Yang left the central bank in 2014 and has worked in senior roles at online payment companies since then.
Last month, another former PBOC official, Tao Xiaofeng, was probed, which according to people close to the matter was related to Yang’s investigation.
China’s booming e-commerce industry has drawn an increasing number of companies to the online payment sector, which is dominated by the two largest players, Alibaba’s Alipay and Tencent’s financial arm WeChat Pay.
The central bank started licensing third-party payment providers in May 2011. The regulator issued more than 270 payment licenses until 2015, when scandals and risks began to emerge. Some players in the payment sector reportedly embezzled clients’ deposits and misused their personal information.
Since 2017, the central bank stepped up oversight of the industry and revoked some licenses citing malpractice. The recent probes suggest the authorities are looking into any possible wrongdoing in issuing third-party payment licenses, some sources told Caixin.
Contact reporter Denise Jia (firstname.lastname@example.org)