Online banking is developing rapidly in China and increased by more than 50 percent in the same period the previous year. (Photo : www.chinainternetwatch.com)
The new guidelines on Internet banking launched by 10 government agencies on July 18 is expected to enhance the development of online financial activities and reduce risks, especially online lending, the Global Times reported.
Analysts believed that the new measures came in time as the country's Internet banking industry is rapidly developing and online financial transactions, including purchasing wealth management products through online platforms, are on the rise.
The report said that the guidelines aim to encourage innovation in Internet banking platforms, products and services, to spur growth and vitality in the industry.
Under the guidelines, the government would assist financial institutions to upgrade their traditional financial services using Internet technologies.
The government also encouraged Internet companies to engage in Internet banking businesses, which include establishing Internet-based payment mechanisms and lending platforms.
The report added that the government would also urge leading Internet banking companies to have themselves listed in the domestic stock markets, as the guidelines called for the establishment of more investment funds that support Internet banking enterprises.
Internet giant Tencent Holdings told the Global Times on Sunday, July 19, that the guidelines are a "milestone" in the development of the country's Internet banking and will further improve the sound development of the industry.
Zhao Xijun, deputy dean at the School of Finance at Renmin University of China, however, cited problems that Internet banking may encounter, such as fraud.
Under the guidelines, online banking is categorized into different business sectors, with each sector placed under the supervision of a specific institution.
The guidelines also include measures that will enable the industry to cope with risks by setting up a mechanism for improved transparency, and formulating an education plan for online banking customers.
To curb risks in online lending, the guidelines would entrust the lender's money to qualified banking institutions, as a form of third-party supervision.
P2P industry portal wangdaizhijia.com reported in July that the total volume of domestic online lending by the end of June had risen by more than 200 percent from the end of 2014 to about 209 billion yuan ($33.7 billion).
