BEIJING • China has tightened controls on online financing, saying it is looking to develop healthy industry growth amid criticism the platforms contributed to an equities plunge that wiped US$3 trillion (S$4.1 trillion ) off the market.
The People's Bank of China (PBOC) will supervise online payments, while the China Banking Regulatory Commission will oversee online lending, trust and consumer finance, the monetary authority said in a statement on its website yesterday.
The central bank will support financial institutions starting online businesses, including banking, insurance and securities-related offerings, it said.
China's online lenders helped fuel an equity-market roller coaster that saw the benchmark index rallying more than 150 per cent in the 12 months through June 12 before crashing abruptly. The sites offered 3.1 billion yuan (S$683 million) of new loans for stock investment in May, about six times that of January, according to the Yingcan Group, which tracks the nation's 2,000 peer-to-peer finance platforms.
"This is a move by the government to tighten regulation of the industry, particularly for smaller companies," said Mr Xu Hongwei, chief executive officer at Yingcan. "We're waiting to see the details expected later this year, such as the minimum required capital for entry."
The China Securities Regulatory Commission (CSRC) said last weekend that it would ban online sites from handing out new loans for share purchases, blaming some "information-technology service providers" for illegal securities practices which it said contributed to the stock plunge.
The PBOC said in yesterday's statement that the CSRC will oversee equity crowdfunding and online fund sales, while insurance will be handled by the China Insurance Regulatory Commission.