Apr 18, 2019 (China Knowledge) - Chinese regulators have commenced preparations for a new pilot program to get the country’s remaining peer-to-peer (P2P) lending platform registered in a new national monitoring system.
The new monitoring system comes as part of the country’s response to regulate its online lending industry which has been fraught with abuses and frauds after lax supervision resulted in multiple scandals in the industry and the collapse of hundreds of platforms.
To date, more than two-thirds of the country’s P2P platforms have closed down.
The new monitoring system will consist of two databases, an information disclosure database and a real-time transaction monitoring database with regulators already ordering qualified P2P lenders to ready their data for submission.
Large P2P platforms with loan balances of more than RMB 5 billion have to be registered with the information disclosure database by end May while platforms with less than RMB 5 billion of loan balance required to register by June.
Regulators aim to start registration for the second real-time transaction monitoring database in pilot cities in more developed areas in the second half of this year and aim to complete the national registration system by 2020.
Platforms that fail to register on the monitoring system will be forced to cease operations.
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