China’s banking regulator told lenders to register all wealth management products they sell and distribute on a centralized electronic system to improve tracking, said two people with direct knowledge of the matter.
Banks were told late last month to register products sold since 2011 on the database run by China Securities Depository and Clearing Co., said the people, who asked not to be identified because they aren’t authorized to speak publicly about the matter.
The China Banking Regulatory Commission has tightened rules on the high-yielding savings vehicles on concerns they’ve lent client money to borrowers that won’t be able to repay debt as the nation’s economy slows. Outstanding wealth management products, which banks have used to retain deposits, rose by 500 billion yuan ($81 billion) to 13 trillion yuan in the first five months of this year, accounting for 16 percent of China’s deposits, Fitch Ratings estimated June 10.
Chinese banks had previously been required to report sales of wealth management products to local branches of the banking regulator, the people said. The Wall Street Journal reported the use of the electronic platform earlier today.
— With assistance by Jun Luo