An Ant Group logo is displayed at the company’s headquarters, an Alibaba subsidiary, in Hangzhou, Zhejiang province, China, October 29, 2020.
Aly Song | Reuters
The Chinese bank regulator on Saturday tightened requirements for commercial banks’ internet lending, amid intensified scrutiny of online loans by internet giants such as Ant Group, Alibaba Group’s financial arm.
Commercial banks must jointly contribute money to provide Internet loans with a partner, and the partner’s share of capital in a loan must not be less than 30%, the China Banking and Insurance Regulatory Commission said in a message.
The balance of internet loans issued by a single-partner bank, including its related parties, should not exceed 25% of the bank’s net capital, he said.
In addition, the balance of the internet loans that commercial banks and cooperative institutions jointly provide may not exceed 50% of the total balance of the bank, according to the guidelines. In a separate question and answer document, the regulator said that companies must comply with the new rules by July 17, 2022.
The regulation will increase the potential capital requirement for technology platforms such as Ant Group, which was on track to raise $ 37 billion in an IPO based on its extensive range of online lending services.
Those hopes were dashed when Chinese regulators intervened to stop the stock exchange listing in November, over concerns that too many consumer loans would threaten the country’s financial system.