Ant Group stops offering sales of online deposit products in Chinese banks
BEIJING (Reuters) – Alibaba’s Ant Group said on Friday it had stopped allowing individuals to deposit funds with banks through its Alipay online platform, as regulatory requirements to ward off financial risks increase.
Ant has “voluntarily discontinued” Alipay’s online deposit products “in accordance with recent regulatory requirements for online deposit services,” according to a company statement.
The deletion will not impact existing people who have already deposited money with banks through Alipay, he added.
The financial arms of major tech companies, including Baidu Inc’s JD Digits, Didi Chuxing and Du Xiaoman Financial, offer high-yield deposits at local banks on its apps.
Chinese regulators have warned the country’s big tech giants that they are under greater scrutiny. A planned $37 billion stock listing of Ant Group was suspended in November after the regulatory warning.
Regulators recently said local lenders attracting deposits across the country using internet platforms are breaking regulatory rules that limit small-town banks from attracting business in their home market.
The products can also encourage high interest rates on deposits, raising costs for banks and intensifying the liquidity crunch for small lenders, said Sun Tianqi, head of the People’s Bank of China’s financial stability office. (PBOC), at a forum this week. , according to local newspaper the 21st Business Herald.
“Proxy sales of bank deposit products on third-party internet financial platforms are illegal financial activities and akin to ‘driving without a license,'” Sun said, adding that such activities should be included in the financial monitoring framework. of the PBOC.
Benchmark rates for six-month term deposits stand at 1.3%, but rates for popular six-month deposit products offered by online platforms can be more than three times higher.
Reporting by Cheng Leng and Ryan Woo; Additional reporting by Kevin Huang and Yingzhi Yang; Editing by Neil Fullick