Ant Group has stopped offering deposit products of several banks from its online payments platform Alipay, to comply with tightened fintech regulations.
In a company statement, Ant said that it has “voluntarily removed” the online deposit products from Alipay “in accordance with the recent regulatory requirements for online deposits services.”
However, the firm added that the move will not affect individuals who have already deposited funds with banks through the Alipay platform.
Ant Group offers interest-bearing deposit products that mature in three or five years.
These products are offered by small regional banks on its Alipay platform.
The three-year deposits yield 4.125% interest, while the five-year deposits yield up to 4.875%, per annum.
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This latest move comes after China slammed the brakes on Ant Group’s $37bn listing last month, which was set to become the largest stock market debut in the world.
Chinese internet search engine Baidu’s platform named Duxiaoman, and fintech JD Digits also offer online deposit products.
A total of 50 small and medium-sized banks (SMBs) in the country offer deposit-taking products on 11 platforms, with CNY500,000 average balance.
However, regulators said that these deposit-taking local lenders – in collaboration with internet firms – are violating the regulatory rules.
The People’s Bank of China (PBoC) head of the financial stability bureau Sun Tianqi said: “The proxy sales of bank deposit products on third-party internet financial platforms are illegal financial activities and are like ‘driving without a licence’.”
Sun added that they should be included in the central bank’s financial supervision framework.