China to step up supervision of financial activities on Internet platforms

[BEIJING] China's banking and insurance regulator on Wednesday said it would strengthen supervision over financial activities by banks and insurers with internet platforms, the latest attempt to rein in China's financial technology sector.

Government watchdogs have tightened scrutiny over China's tech giants in recent months, drafting anti-monopoly rules and guidelines seeking to limit collection of personal data by mobile apps, including those used to make payments.

"It is necessary to effectively strengthen the supervision of financial activities on internet platforms," the China Banking and Insurance Regulatory Commission (CBIRC) said in a statement issued after an annual meeting.

The regulator has already warned consumers to guard against borrowing spurred by internet finance platforms that hide the real costs of such debt.

The CBIRC this month banned commercial banks from using third-party internet platforms to sell deposit products, including those relating to fixed-term deposits.

On Wednesday, it said there needed to be tighter scrutiny of the development of "financial cooperation activities" between banks and insurers, on the one hand, and internet platforms on the other.

Last November, China abruptly suspended the US$37 billion listing of Ant Group, the financial technology firm founded by billionaire Jack Ma, who had wanted it to be treated as technology company rather than a financial institution subject to much tighter regulation.

On Wednesday, the CBIRC said that similar businesses and entities should be treated equally, vowing to stamp out "monopolistic and anti-competitive behaviour" and prevent "disorderly expansion" in the financial sector.

Ant controls a range of financial institutions, including securities and insurance firms, and the central bank has said it should set up a holding firm according to law.

The CBIRC also said it would push large banks to provide risk management tools and models to smaller banks, and to work to eliminate financial risks and keep China's macro leverage ratio stable.

China's banking industry disposed of US$467 billion of non-performing assets in 2020, the regulator said. The total amount of non-performing loans disposed of in the period 2017-20 exceeded the amount for the previous 12 years combined, it said.

REUTERS