BEIJING (CHINA) – Within a maximum of two years China’s financial technology companies are expected to meet capital adequacy requirements, said Guo Shuqing, head of the China Banking and Insurance Regulatory Commission (CBIRC) on Tuesday.
Chinese financial regulators have rolled out a slew of measures since last year to tighten the oversight of online lending practices in the country, particularly of technology firms looking to expand into the financial space, moving away from its once laissez-faire approach.
Micro lenders, consumer finance firms and banks operated by internet platforms should all have adequate capital like other financial institutions, Guo said at a news conference.
“Starting a business needs capital, so does starting a financial business,” Guo said.
“As long as internet platforms conduct financial operations, the requirement of capital adequacy ratio on them should be the same as financial institutions.”
Financial regulators have set various grace periods for different internet platforms, according to Guo. Some have until the end of 2020 and others until the middle of 2021 to meet capital adequacy requirements, he said.
“But by a maximum of two years, (the capital adequacy of) all platforms should be back on track,” Guo added.