BEIJING (Reuters) – China’s Ant Group signaled a set of rules of financial self-discipline on Friday, amid intense scrutiny of its activities by the authorities and the country’s general tightening of financial technology regulations.
The rules, the first of the kind publicly released by the financial technology giant, come about four months after China suspended the group’s $ 37 billion plan for a listing of shares in Shanghai and Hong Kong.
Chinese regulators have increased their control over fintech companies amid concerns about systemic financial risks brought about by the financial empire affiliated with China’s e-commerce giant Alibaba Group.
In response to intense regulatory pressure, the group has been curbing some of its operations, taking steps to align its capital requirements with those of banks and transforming itself into a financial holding company.
In a statement, Ant said its consumer lending platforms should not lend to minors and should prevent small business loans from flowing into the stock and property markets.
The group’s credit rating service, Zhima Credit, will also not be available to financial institutions, including microcredit lenders, he said, without elaborating the specific risk of such collaborations.
As a reflection of regulators’ tough stance on financial risks, Guo Shuqing, head of China’s Banking and Insurance Regulatory Commission, warned last week that bubble risk was a central issue facing China’s real estate sector.
Regarding the restructuring of Ant’s business, Guo said that there are no restrictions on the financial businesses it develops, but that all of its financial activities must be regulated by law.
Previously, Ant reduced its loan limits for some young users of its Huabei virtual card product. The reduction in the credit limit aims to promote more “rational” consumption habits among users, he said.
Reporting by Cheng Leng, Yingzhi Yang and Ryan Woo; Editing by Christopher Cushing and Muralikumar Anantharaman