BEIJING/SHANGHAI (Reuters) – China’s central bank and three financial regulators held talks with Ant Group Co Ltd’s top executives and its founder Jack Ma on Monday as Beijing published new draft rules for online micro-lending.
The meeting comes after Ma questioned whether international financial regulations are suitable for the Chinese economy at a summit held in Shanghai at the end of October.
Ant, backed by Alibaba Group Holding Ltd (N:BABA) (HK:9988), is China’s dominant mobile payments firm, also offering loans, insurance and asset management, and is set to raise about $34.4 billion in the world’s largest initial public offering.
The People’s Bank of China, China Securities Regulatory Commission (CSRC), China Banking and Insurance Regulatory Commission and foreign exchange regulator held the talks with Ant’s controlling shareholder Ma, its Executive Chairman Eric Jing and Chief Executive Simon Hu, CSRC said in a statement, without giving details.
An Ant spokeswoman said the company would “implement the meeting opinions in depth”.
Draft micro-lending rules, published separately by the central bank and banking regulator, set a 5 billion yuan ($748 million) registered capital threshold for micro-lenders that offer loans online across different regions.
While it made no mention of Ant, the draft comes as regulators sharpen their focus on banks that heavily use micro-lenders or third-party technology platforms like Ant for underwriting consumer loans, amid fears of rising defaults and deteriorating asset quality in a pandemic-hit economy.
The draft is open for public feedback until Dec. 2.
Guo Wuping, head of the consumer protection division at the banking regulator said in a Monday commentary in the 21st Century Business Herald that the rights of users of Ant-owned consumer loan companies Huabei and Jiebei deserve close scrutiny.
Guo in the commentary said such fintech loan companies effectively perform the functions of banks and should adopt similar risk controls.
New methods of financing and disorderly competition has created “chaos that violates the rights and interests of financial consumers,” Guo said in the commentary.
China’s Financial Stability and Development Committee, a cabinet-level body headed by Vice Premier Liu He, on Sunday flagged risks associated with the rapid development of fintech, in what was widely interpreted as a government response to the rise of players like Ant.