China to toughen supervision of non-bank payment institutions

China's central bank has released a draft for comments of regulations aimed at strengthening anti-monopoly supervision of payment services by non-bank institutions.

The draft clearly defines the scope of the relevant market and the criteria for determining market dominance, in a bid to maintain the fair order of market competition.

If a non-bank payment institution meets certain conditions in terms of market share, the People's Bank of China (PBOC) can provide early warning of a range of measures, including regulatory interviews, according to the draft. It can also call for agencies to review whether the institutions have a dominant market position.

If non-bank payment institutions fail to follow the principles of safety, efficiency, honesty, and fair competition, and the healthy development of the payment service market is seriously affected, the PBOC can suggest that the State Council's anti-monopoly law-enforcement agencies stop market dominance abuse and centralization by splitting the institutions based on payment business types.

The draft also requires payment institutions to deposit their reserves in the PBOC or qualified commercial banks and specify the corresponding prudent oversight measures to protect the users' rights and interests.

(Source: Xinhua News Agency)