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Online lending faces tighter regulation in China

Xinhua, January 11, 2016 Adjust font size:

Shanghai and some other local governments have tightened the rules on registration of Internet finance companies to combat the risks of online lending and borrowing, industry insiders said.

"It is now very difficult to register an Internet finance company in Shanghai," said an executive of a Shanghai company that specializes in registering new businesses.

Sources with Shanghai Administration for Industry and Commerce said the authority had not issued an exact ruling banning the registration, but district regulators may have introduced their own risk control measures.

The sources said regulators would conduct risk evaluations before allowing Internet finance companies to register in Shanghai.

China Banking Regulatory Commission last month issued a draft proposing stringent restrictions on online lenders, prohibiting them from accepting public deposits, pooling investors' money to fund their own projects, or providing any kind of guarantee for lenders.

Shenzhen, China's booming heartland of hi-tech companies, has also temporarily halted registration of new Internet financiers. Endit