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    CBIRC Issues Notice on Management of Online Lending for Banks

    July 15, 2022

    The China Banking and Insurance Regulatory Commission (CBIRC) issued provisional rules on the capital management of financial asset investment companies. The key provisions included in the rules are related to the capital adequacy ratio calculation, definition of tier 1 and 2 capital, measurement of risk-weighted assets, leverage ratio calculation, and internal capital adequacy assessment procedure. CBIRC also issued the notice on strengthening the management of online lending of commercial banks and improving the quality and efficiency of financial services, along with the frequently asked questions related to the notice.

    The notice thoroughly implements the decisions by the central government for promoting the standardized and healthy development of the platform economy and strengthening the supervision of online lending business. The notice encourages commercial banks to steadily promote digital transformation and gives full play to the positive role of Internet loans in helping market entities ease difficulties, strengthening financial services for new urban residents, and optimizing financial support in key areas of consumption. In view of the problems such as insufficient risk control in the business operation of commercial banks, the notice refines and clarifies the requirements for loan management and independent risk control, urging banks to fulfil the major responsibility of loan management, strengthen the management of information and data, improve the management of loan funds, standardize cooperative business, and enhance the protection of consumers’ rights and interests.

    In terms of the arrangements during the transitional period, considering factors such as commercial banks’ rectification progress, business continuity, and connection with credit reporting rules, the transitional period of the notice is consistent with the "Measures for the Administration of Credit Reporting Services,"—that is, from the date of issuance to June 30, 2023. The transitional period of the "Interim Rules on Commercial Banks' Online Lending Business" has also been extended, to ensure the support to the real economy. In the next step, CBIRC will strengthen supervision and guidance, ensure the implementation, and promote commercial banks to carry out online lending prudently according to law and improve their operation and management, to continuously improve the quality and efficiency of financial services to the real economy.


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    Keywords: Asia Pacific, China, Banking, Lending, Credit Risk, Regulatory Capital, Capital Management Rules, Digital Lending, Regtech, CBIRC

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