Markets· Equity

China’s banking regulators finalized guidelines for banks’ online loans

minutes 2021/02/22 03:51:42

Feb 22, 2021 (China Knowledge) - With increasing scrutiny on online lending giants such as Ant Group and Alibaba, China’s bank regulators have tightened guidelines on the banks’ online loan business for commercial banks. This means commercial banks must have a partner to issue loans online, with the partner to fork out more than 30% of the loan amount.

In addition, the balance of such loans must not exceed 25% of the bank’s net off the tier-1 capital. Also, the loans from the commercial banks and cooperative institutions must not be more than 50% of the bank’s total balance.

These regulations would require the increase the capital reserves needed for technology platforms such as Ant group to operate.

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