China publishes rules for online bank lending – Journal
BEIJING (Reuters) – China’s banking and insurance regulator on Saturday released draft rules on commercial banks’ online lending activities, prohibiting the use of such loans for riskier investments and capping consumer credit online banking, in order to control financial risks.
This regulation is the first to specifically target the online lending activities of banks, which has grown aggressively with the development of financial technology, which has led to the misuse of consumer credit by banks and to the an increase in household debt.
Bank loans issued online cannot be used to purchase real estate, stocks, bonds, futures, financial derivatives and asset management products and to make other riskier investments, a said the China Banking and Insurance Regulatory Commission.
“If it turns out that the object of the loan is illegal or is not being used in accordance with the agreed purpose, steps must be taken to recover the loan early,” he said.
Banks should cap online consumer credit lines for each customer at 200,000 yuan. The rules will help control financial risks in online lending activities, protect the interests of borrowers and rectify the use of certain loans issued by banks.
Posted in Dawn, le 10 May 2020