On August 4 2017 the People's Bank of China (PBOC) issued Announcement 209/2017 regarding the establishment of a non-bank payment entities network payment and clearing platform.
The number of non-bank payment business and deposit funds managed by non-bank payment entities has grown rapidly in recent years. Due to relaxed regulations, the non-bank payment market has become relatively disorganised. As they bypass supervision by the central authorities, non-bank payment entities could misuse funds and undertake illegal practices, such as money laundering. The PBOC has therefore decided to enhance its involvement in the online non-bank payment market by requiring that all relevant transactions by non-bank payment entities under its supervision be conducted via the network platform.
From June 30 2018, all online transactions by non-bank payment entities which involve bank accounts must be conducted via the network platform.
All affected banks and non-bank payment entities must complete the relevant preparation in order to be able to access and transfer their business to the network platform by October 15 2017.
The announcement is a major step towards the PBOC's establishment of a centralised and transparent online payment system with unified regulatory requirements for all non-bank payment entities, which should enable the PBOC to control any financial risks that may arise in the market.
For further information on this topic please contact Wu Jiejiang at Jingtian & Gongcheng by telephone (+86 10 5809 1000) or email ([email protected]). The Jingtian & Gongcheng website can be accessed at www.jingtian.com.