Chinese financial watchdog has announced a two-year deadline for financial technology companies to meet same capital adequacy requirements as traditional banks.
The decision by China Banking and Insurance Regulatory Commission (CBIRC) is aimed at curbing risk in the sector and curtail monopolistic practices.
CBIRC head Guo Shuqing said that the different deadlines set for different financial services with a maximum two years of grace period.
In December last year, it was reported that CBIRC and the People’s Bank of China are planning to impose “special and innovative regulatory measures” on fintech giants.
Since last year, the country’s financial watchdog has been introducing several rules for most of the online financial services, including e-commerce, credit-scoring and payment platforms.
Guo added that country continues to support fintech innovations in providing credit for small businesses, but they must comply with regulations and laws.
The comment comes close on the heels of China scrapping Ant Group’s $37bn listing, which was set to become the largest stock market debut in the world.
Additionally, the present regulatory rules on capital requirements will affect Ant’s micro lending subsidiaries, Jiebei and Huabei.
These two landers have provided a total of RMB1.7tn ($263 bn) consumer loans to 500 million people by mid last year.