China’s strict P2P rules could trigger a run on deposits
China's tighter regulations on peer-to-peer (P2P) lending could trigger a run on deposits. Authorities are planning to examine the credentials of about 3,000 P2P lenders and expel any controversial operators by March following a string of scandals involving at least CNY 100bn ($14.4bn) worth of deposits. Only 200 lenders are expected to pass the review process, with the rest forced to cease operations and repay depositors. Richard Zhu, senior IT engineer at Zillion Fortune, said the move is expected to trigger a "huge wave" of money withdrawals due to the risk of liquidations.
P2P began flourishing on the mainland five years ago, driven by Beijing’s support for fintech firms. Photo: Handout