PBOC Vows to Step Up ‘Prudential Oversight’ of Online Platforms
China’s central bank vowed to tighten “prudential oversight” of online platforms’ financial activities.
(Bloomberg) -- China’s central bank vowed to tighten “prudential oversight” of online platforms’ financial activities and step up supervision in the payments sector.
The People’s Bank of China will step up efforts against monopolies and prevent the disorderly expansion of capital, it said in a statement Wednesday, citing its annual work conference for this year, which was held on Monday. It will also tighten scrutiny of the payments sector and individual credit-scoring businesses, as well as prohibit excessive marketing of financial products.
The stepped up oversight of online financial service platforms could have further implications for Jack Ma’s Ant Group Co. Authorities are also studying plans to force Ant to divest equity investments in some financial entities, curbing the company’s influence over the sector, according to a person familiar with the matter.
Over the past 17 years, Ant has grown rapidly from a PayPal-like operation into a full suite of financial services, including banking and wealth management. Its Zhima Credit, set up in 2015 to assess the credit worthiness of consumers and small-business owners, is yet to get a credit-scoring license.
If users opt-in to the service, Ant runs checks on transaction histories and also uses data from third-party providers to check credit worthiness. Ant charges companies that tap into the service a fee and if customers score high enough, they can avoid paying deposits on everything from renting a bike to booking a room at hotels like the Marriott.
The PBOC also said it will continue providing financial support to small companies, including allowing them to further postpone their principal and interest repayments on inclusive loans. In addition, the central bank pledged to guide financial resources to support the development of a green economy and the carbon trading system, in order to achieve the carbon neutrality goal.
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With assistance from Bloomberg