Ant Group related sources told the media on December 18 that according to the Chinese regulators’ requirements for the regulation of the Internet deposit industry, all the Internet deposit products on the Ant platform have been removed from the shelves and are only visible to users who have purchased the products, and users who hold the products are not affected.
The Ant Group said that it will seriously implement the relevant regulatory norms and requirements, and use technology to better support financial institutions and serve the real economy. It is worth noting that this is the first Internet platform to take down its deposit products after Sun Tianqi, director of the Financial Stability Bureau of China’s central bank, talked about the issue of deposits on third-party Internet platforms again on Dec. 15.
Earlier on Friday, “bank deposit” products were still available on Jingdong Finance and Du Xiaoman for users to buy. The media contacted Du Xiaoman and Jingdong Finance to find out if the products would be shelved, but as of press time, the companies did not reply. According to the Alipay interface, bank deposit products are various deposit assets issued by commercial banks and are regulated by the China Banking and Insurance Regulatory Commission. The starting deposit threshold is low, the assets are highly secure, and the principal and interest are protected by the national insurance system within 500,000.
Sun Tianqi suggested in his speech at the time that adding up the banks currently displayed on the 11 head platforms involved more than 50 banks with deposits on sale, the vast majority of which were small and medium-sized banks. Most of the single-account deposits are below 500,000 yuan (inclusive). And some banks rely on the Internet platform to absorb deposits, the deposit structure has changed greatly.
Sun Tianqi pointed out that there are also some high-risk institutions absorbing deposits through Internet platforms, some of which have reached 70% of deposits. These high-risk institutions are weak in their own ability to resist risks, and the high proportion of deposits on Internet platforms has further increased the instability of their liability funds.
Sun Tianqi said that the third-party Internet platform deposit model has broken through the geographical restrictions of local corporate banks’ operations, and some local banks have been able to absorb deposits from the whole country through the Internet financial platform, and have become national banks in terms of liability business. He said that the liquidity characteristics of such deposits are also different from traditional savings deposits, bringing new issues to regulators and financial institutions. Internet financial platforms carrying out such financial business are illegal financial activities “driving without a license” and should also be included in the scope of financial supervision.
Chinese officials have recently taken a number of actions to consolidate online finance, including announcing new regulations on online microfinance early last month, suspending what could have been the world’s largest IPO of Ant Group, and then issuing the “Anti-monopoly Guidelines on the Platform Economy (Draft for Comments)”.
More than a month after the suspension of Ant’s IPO, the group’s chairman, Mr. Inoue, recently said that he would make every effort to do a good job in the aftermath of the suspension under the guidance of regulation, and pointed out that the group had set itself three requirements: first, to deepen its understanding of the relationship between security and development, system security and individual security; second, to continuously improve corporate governance, ensure an effective corporate governance structure, clarify responsibilities, strengthen mechanisms and improve systems; third, to put comprehensive risk governance into every business, not only to ensure that each of its own businesses undergoes security and risk medical examination, but also to further standardize financial cooperation, strengthen joint prevention of financial risks with partners and maintain financial security.
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