CHI CBIRC Regulating Internet Loans


On Feb. 20, CHI CBIRC issued notice on further regulating loans.


  • CBIRC issued notice on further regulating internet loan business of commercial banks.
  • Follows Jul. 2020 CHI CBIRC issued measures for administration of loans, see #82143.
  • Follows CHI CBIRC Nov. 2020 proposed measures for online microfinance, see #89927.
  • Also follows Nov. 2020 CHI CSRC, SSE suspended Ant Group STAR listing, see #89891.
  • Prudential Controls on Internet Loans
  • Requires commercial banks to strengthen responsibility for risk control, independently carry out internet loan risk management, prohibit outsourcing of key risk control links.
  • When commercial banks and partner institutions jointly contribute funds to issue loans, the partner's capital contribution ratio in a single loan shall not be less than 30%.
  • Stipulates the concentration index; the balance of online loans issued by a commercial bank and a single partner shall not exceed 25% of the bank's net tier 1 capital.
  • Stipulates the quota index; the balance of internet loans jointly issued by commercial banks and all of its partner institutions shall not exceed 50% of the total loan balance.
  • Conducting internet loan business across jurisdictions of registration is not allowed.
  • Effectiveness
  • 30% rule and restrictions on jurisdictions come into effect on Jan. 1, 2022; the rest of the measures will follow transitional provisions in measures for administration of loans.
  • Commercial banks are to formulate rectification plans for internet loan businesses that do not meet requirements of this notice, and complete rectification during transition.
  • Feb. 26, 2021 Reporter Q&A
  • On Feb. 26, 2021, CHI CBIRC answered reporter questions on the recent rule changes.
  • Said that the market response after release of the notice, has been generally positive.
  • CBIRC has taken measures to make up for shortcomings in the supervisory system.
  • Measures aim for inclusive finance, risk management, deeper reform and opening up.
  • Has set up a working group to investigate China Life Insurance Co., after a former employee posted a video on Weibo where employees reported on company fraud.
  • Special rectification action against illegal online lending has achieved positive results; all online lending institutions that performed illegal activity have ceased operations.
  • Focus of work in the next phase will shift to establishment of a long-term mechanism for online lending institutions to deal with supervision of existing online lending risk.

Regulators CHI CBIRC
Entity Types Bank; BHC; IHC; SIFI
Reference PR 2/26/2021; RN CBIRC No. 24 (2021), PR 2/20/2021
Functions Compliance; Financial; Operations; Outsourcing; Reporting; Risk; Treasury
Countries China
Products Banking; Corporate; Loan
Regions AP
Rule Type Guidance
Rule Date 2/20/2021
Effective Date 1/1/2022
Rule Id 98508
Linked to Rule :82143
Reg. Last Update 2/26/2021
Report Section International

Last substantive update on 02/28/2021