New regulations to come out next week on small online lenders: media report

Financial regulators will tighten their grip on China's small online lenders, with new regulations due next week, a media report said.

A sudden change in regulations on cash loans is not expected, however.

The People’s Bank of China, the central bank, the China Banking Regulatory Commission (CBRC) and some provincial government officials convened an emergency meeting on Thursday morning to discuss developments and regulations involving the online lending sector, financial news site yicai.com reported.

Details of the discussion remained confidential ahead of the release of the regulations, yicai.com reported, citing an unidentified source who attended the meeting.

But a second source told yicai.com that the CBRC had been preparing new regulations, which are set to be released sometime next week.

Online lending has surged in China, boosted by a massive consumer base, but problems have arisen due to shortfalls in the regulations as well as their enforcement, media reports noted.

Ahead of the meeting on Thursday, media reports suggested that regulators had directed some local governments to stop issuing new licenses for such financial operations amid the start of a crackdown.

However, one source told yicai.com that a sudden, complete halt of license issuance was unlikely, but the source noted that different rules might apply in different places.

As of November 6, there were 242 small online lenders with licenses in China, though some had not completed the registration process, yicai.com reported. It said 60 companies had submitted license applications.