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CCB safeguards investors’ funds in P2P
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Shanghai-based peer-to-peer lender China Rapid Finance signed an agreement with the China Construction Bank, the country’s second-biggest bank by assets, on safeguarding investors’ funds.
The P2P lender plans to build a platform with CCB, allowing a single investor to keep a sub-account under the P2P’s account in the bank’s system so that they can do all their financial transactions, including checking, investing and withdrawing funds. The platform will be online by the end of September, the firm said.
The P2P lender’s tie-up with a commercial bank was sparked by tighter regulations governing the sector. The People’s Bank of China instituted new rules on the Internet finance industry in July. The rules only allow P2P platforms to serve as intermediaries between lenders and borrowers, as well as ban online sites from raising funds of their own to lend out.
Industry insiders said that up to 90 percent of P2P sites may need to significantly change their business models or shut down under the new rules.
CCB is the first “big four” bank in China to provide custody to online lending platforms. Previously, only joint-stock banks such as China Minsheng Bank and China Citic Bank had tied up with other P2P sites like CreditEase and Jimubox to offer a similar service.
It’s a booming industry in China because loans secured via the Internet jumped to a record 97.5 billion yuan (US$15.3 billion) in August, lifting the total lending to 863.5 billion yuan so far, said Online Lending House, a portal site that tracks the sector.
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