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PBoC unite MPS to crack down illegal activities in internet financial sectors

June 4 Beijing– The People’s Bank of China (PBoC) announced that recently, Pan Gongsheng, Deputy Governor of the People’s Bank of China, Director of the State Administration of Foreign Exchange, and leader of the Internet Finance Risk Restructuring Leading Group, led the team to the Ministry of Public Security (MPS) and held talks with Meng Qingfeng, Deputy Minister of MPS. The two parties exchanged opinions on the rectification of Internet financial risks, the crackdown on underground banks and illegal foreign exchange trading platforms, and on the arrangements of future moves.

Xue Hongyan, director of the Internet Financial Center of Suning Financial Research Institute, told a reporter that with the help of internet, various financial events was trending fast. Effective control of various hidden risks require cross-department cooperation to strengthen coordination.

Since April 2016, the People’s Bank of China has taken the lead in conducting rectification work on Internet financial risks.

The P2P online loaning platform is being targeted. As per the “P2P Online Loan Industry Monthly Report, May 2018” released by Wangdaizhijia, there are 1,872 active platforms as of the end of May 2018, a decrease of 5 websites compared to the end of April. According to incomplete statistics, the number of problematic platforms in May was 38, and a total of 19 new platforms were launched in May. There were also nine newly discovered suspensions and problem platforms. In addition, five platforms resumed their bids in May. As of the end of May 2018, the number of p2p loaning platforms that ceased to function reached 4270.

Xue Hongyan believes that in the field of Internet finance, regulatory frameworks has been established in the mainstream business models. But due to the large number of institutions and the uneven execution levels, the phenomenon of illegal fund-raising platforms is still very common and needs to be continuously rectified. Some new funding activities have also emerged from time to time, which is highly confusing and requires all parties to strengthen review and investigation.

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