The world’s largest fintech company Ant Group has issued a set of financial self-discipline rules in light of increased scrutiny on its activities by Chinese authorities and the country’s move to fully tighten its financial technology regulations.
Publicly issuing its guidelines is a first of their kind move made by the fintech giant in nearly four months after China halted the group’s $37 billion plan for a share listing in both Shanghai and Hong Kong.
The Chinese regulators have toughened their scrutiny on fintech companies, amid concerns over systemic financial risks brought by the financial empire affiliated to Alibaba Group, the eCommerce giant of China.
In light of the increasing regulatory pressure, the group has been reining in some of its operations, taking steps to bring its capital requirements in line with those of banks, and restructuring itself into a financial holding firm.
In a statement issued, the fintech giant stated that its consumer loan platforms should not issue loans to minors and must prevent small business loans from flowing into stock and property markets. Ant group’s credit-rating service Zhima Credit will also not be available to financial institutions including microloan lenders, without elaborating the specific risk of such collaborations.
Last week, Guo Shuqing, head of the China Banking and Insurance Regulatory Commission alerted that bubble risk was a core issue faced by China’s property sector, which clearly reflects the regulators’ tough stance on financial risks.
Regarding the restructuring move of Ant Group, Mr. Guo commented that there were no restrictions on the financial business it develops but that all of its activities should be regulated by laws.
Earlier, Ant lowered its borrowing limits for some young users of its Huabei virtual card product. The credit limit reduction is intended to promote more “rational” spending habits among users.
Meanwhile, reports are there the Chinese antitrust authority is considering imposing a record fine on Ant Group’s parent company Alibaba over suspected anticompetitive behavior.