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Chinese Regulators Finalize Guidelines for Banks’ Internet Lending Business



On October 29, 2020, an image of the headquarters of an affiliate of Alibaba in Hangzhou, Zhejiang Province, China showed the Ant Group logo.

Aly Song | Reuters

China’s bank regulators tightened requirements for commercial banks’ internet lending business on Saturday, as internet giants are increasingly scrutinizing online loans such as Ant Group, the financial arm of Alibaba Group.

The China Banking and Insurance Regulatory Commission stated in the announcement that commercial banks must jointly issue Internet loans with their partners, and the partner’s capital ratio in the loan shall not be less than 30%.

The balance of Internet loans issued by a bank and a partner (including its related parties) shall not exceed 25% of the bank̵

7;s net tier 1 capital.

In addition, the guidelines point out that the balance of Internet loans jointly issued by commercial banks and cooperative institutions shall not exceed 50% of the total bank balance. The regulator said in a separate question and answer document that companies must comply with the new regulations by July 17, 2022.

The regulations will increase the potential funding requirements for technology platforms such as Ant Group. Ant Group will raise 37 billion US dollars through an initial public offering based on its extensive online lending services.

When Chinese regulators stepped in to stop issuing stocks in November, these worries were dashed because of concerns that over-borrowed consumer debt would pose a threat to China’s financial system.


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