China central bank issues guidelines on internet finance development

The People's Bank Of China in Beijing.
The People's Bank Of China in Beijing.PHOTO: EPA

BEIJING (REUTERS) - China's central bank on Saturday issued guidelines promoting the development of internet finance, saying it would support "qualified" financial institutions to set up platforms for online banking, insurance and securities businesses.

It added it would encourage high-performing and qualified internet finance firms to list.

A senior central bank researcher said last month that regulators should set up clear rules allowing banks to set up online finance subsidiaries to fend off rising competition from technology giants that have expanded into their territory.

"In recent years, China has seen rapid development in internet finance, but some problems and hidden risks have also cropped up," an official with the People's Bank of China, the central bank, said in a statement.

Fund security, operating risks, an imperfect credit system and consumer protections were among the issues, said the official.

The central bank called on the government to support internet firms in setting up platforms for expenditures and loans, crowdfunding, the sale of financial products and other financing platforms.

It called for broadening channels of financing and supporting private investment funds to back the internet finance industry.

The bank also recommended tax breaks for qualifying small enterprises including start-ups, saying that provincial level governments should increase their support for those companies.

Alibaba Group Holding Ltd said in April its finance affiliate sped up a drive to be a fully-fledged online financing network by launching an e-commerce tracking stock index. It launched an internet bank targeting small and medium enterprises last month.