The Financial Supervisory Commission on Thursday gave its nod to guidelines on collaborations between peer-to-peer (P2P) lending platforms and commercial banks, in a move to support the development of emerging financial services.
The commission said that as the nation’s laws do not prohibit lending and borrowing between individuals, it supports P2P loan platforms as long as they implement sound risk management and consumer protection.
Under the guidelines, banks may provide custodian and trust account services to P2P platforms, as well as transaction processing to meet rules against collection of deposits by non-bank entities, the commission said.
With the permission of borrowers, banks will be allowed to provide credit information and risk modeling for newly established P2P platforms.
In addition, P2P operators may ask their clients to furnish credit reports from the Joint Credit Information Center (聯合徵信中心).
However, banks are barred from making recommendations on decisions about loan approval, interest rates and principal amounts.
The guidelines also regulate the so-called peer-to-bank (P2B) model, where banks participate as lenders on P2P platforms.
While the P2B model might be seen to contradict the spirit of P2P platforms, which tend to feature more favorable interest rates and returns for participants than conventional lending, banks have said that they view P2P models as a new source for client acquisition, Banking Bureau Deputy Director-General Sherri Chuang (莊琇媛) told a news conference in Taipei.
Chuang said that banks must file an application with the commission to enter the P2B businesses.
Banks have said that they would be selective in taking on P2P borrowers, as they are likely to be part of the unbanked population, Chuang said.
The commission said that it does not track the scale and delinquency rates of P2P loans, as this falls outside of its jurisdiction.
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