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.
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For further information on this topic please contact Wu Jiejiang at Jingtian & Gongcheng by telephone (+86 10 5809 1000) or email (firstname.lastname@example.org). The Jingtian & Gongcheng website can be accessed at www.jingtian.com.?