China tightens rules on $1.3 trln credit card business

Folks movie the new indicator of China Banking and Coverage Regulatory Fee (CBIRC), the freshly merged regulatory human body, at its workplace in Beijing, China April 8, 2018. REUTERS/Stringer

Sign-up now for Cost-free unrestricted accessibility to Reuters.com

SHANGHAI, July 8 (Reuters) – China unveiled tighter guidelines late on Thursday to far better regulate its $1.3 trillion credit rating card marketplace, urging creditors to undertake a “prudent” development approach, and watch threats additional closely.

Banks are also barred from applying the quantity of cards issued or sector share as most important effectiveness metrics, and are essential to cap the variety of dormant playing cards at 20% of full, according to rules jointly printed by China’s central financial institution, and the country’s banking regulator.

“China’s credit card company has been increasing promptly, taking part in a key position in facilitating payment and use,” the China Banking and Insurance plan Regulatory Commission (CBIRC) explained in a assertion on its internet site accompanying the launch of the new policies.

Register now for Totally free limitless entry to Reuters.com

“Not too long ago, nonetheless, some banks … are lax in chance management, and have behaved in means that harm customers’ fascination,” the regulator stated.

Chinese banks have issued a overall of 800 million credit cards as of the conclude of 2021, with exceptional financial loans totalling 8.62 trillion yuan ($1.29 trillion), in accordance to the People’s Lender of China. Around 86 billion yuan of credit history card loans, or 1% of complete fantastic, are overdue for six months or more time.

The new rules call for banking companies to tighten scrutiny over credit history card loans, and bolster threat administration regulate.

Banking companies must also established up a sound procedure to keep an eye on, determine, warn and stop abuse in the credit history card business enterprise, in accordance to the rules.

($1 = 6.7005 Chinese yuan renminbi)

Sign up now for Free unrestricted access to Reuters.com

Reporting by Samuel Shen and Brenda Goh
Editing by Shri Navaratnam

Our Standards: The Thomson Reuters Believe in Principles.

Amber

Next Post

Tory leadership latest news: Truss team denies Mordaunt ‘black-ops’ campaign ahead of TV debate

Fri Jul 15 , 2022
Conservative leadership race: Who is Penny Mordaunt? Allies of Liz Truss have denied involvement in a “black ops” campaign against Penny Mordaunt ahead of the first television debate for the remaining Tory leadership candidates this evening. Ms Mordaunt has been attacked by a supporter of the foreign secretary, Lord David […]