CHI NAFR Consumer Finance Firms


On Dec. 18, CHI NAFR proposed to amend administration measures.


  • CHI NAFR proposed to amend Measures for the administration of consumer finance companies and published the answers to reporters' questions regarding the measures.
  • Amendments
  • Increase the asset, operating income and other indicator standards of major investors.
  • Increase the shareholding ratio requirement for major investors to no less than 50%.
  • Increase the shareholding ratio of investors with experience in consumer finance management and risk control; increase minimum capital requirements for registration.
  • Stipulated that the balance of guaranteed credit enhancement business of consumer finance companies shall not exceed 50% of the company's total loan balance.
  • Distinguish between basic business and special business scope; cancel non-main business and non-essential business, and strictly regulate hierarchical business.
  • Enhance corporate governance supervision; clarify the regulatory requirements such as shareholder obligations, salary management, related transactions and disclosure.
  • Clarify the regulatory requirements in terms of credit risk, liquidity risk, operational risk, information technology risk as well as reputation risk management.
  • Optimize and add some regulatory indicators; improve the market exit mechanism.
  • Effectiveness
  • Consultation is open for public opinions which shall be submitted by Jan. 19, 2024.
  • Mar. 2024 Amendment Published
  • On Mar. 18, 2024, CHI NAFR published the amended measures and answers to press.
  • The measures optimize and adjust the business scope of consumer finance companies.
  • Distinguish basic and special businesses; cancel non-core, non-essential businesses.
  • Regulatory indicators in measures undergo significant changes, including the addition of limits on guarantee-backed credit loans, capping the balance at 50% of total loans.
  • As well as an increase in the liquidity ratio requirement to no less than 50%.
  • The measures are effective from Apr. 18, 2024.

Regulators CHI NAFR
Entity Types Bank; MSB
Reference PR, RN NAFR No. 4 (2024), 3/18/2024; CP, PR, 12/18/2023
Functions Compliance; C-Suite; Financial; Legal; Product Design; Registration/Licensing; Reporting; Risk; Treasury
Countries China
Category
State
Products Banking; Fixed Income; Loan; Securitization
Regions AP
Rule Type Final
Rule Date 12/18/2023
Effective Date 4/18/2024
Rule Id 195279
Linked to N/A
Reg. Last Update 3/18/2024
Report Section International

Last substantive update on 03/21/2024