China’s banking regulator criticized an online lender backed by Xiaomi Corp (小米) over a range of breaches, in the latest sign of intensifying scrutiny on the financial operations of the nation’s technology behemoths.
Sichuan XW Bank Corp (四川新網銀行), one of China’s three Internet banks, was found to charge interest rates of as high as 30 percent on consumer loans with an auto financing platform, and failed to follow risk assessment and debt collection regulations, the China Banking and Insurance Regulatory Commission said in a statement yesterday.
The admonishment came after consumer complaints against the lender have increased significantly since the end of 2019, the regulator said.
Photo: Bloomberg
While no punishment was announced, the commission said that all banks and insurers should conduct a self-investigation into their cooperation with third-party platforms and protect consumers’ rights.
China has escalated a campaign to curb the influence of its tech corporations after the top leadership pledged to expand oversight of financial technology, stamp out monopolies and prevent the “unregulated” expansion of capital.
The commission on Wednesday also prohibited online platforms from lending to college students.
Founded in late 2016 by a group of private conglomerates, XW Bank, along with Ant Group Co’s (螞蟻集團) MYbank (網商銀行) and Tencent Holdings Ltd’s (騰訊) WeBank (微眾銀行), operates without any brick-and-mortar branches.
New Hope Group (新希望集團) holds a 30 percent stake as the largest shareholder, followed by Xiaomi with a 29.5 percent stake via a unit.
The bank had 44 billion yuan (US$6.8 billion) of assets by the end of 2019, its annual report said.
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