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China's central bank drafts rules for fund to help manage risks of third-party payment firms

Published 10/13/2020, 05:53 AM
Updated 10/13/2020, 05:55 AM
© Reuters. Man wearing a mask walks past the headquarters of the People's Bank of China, the central bank, in Beijing
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BEIJING (Reuters) - China's central bank issued draft rules on Tuesday for setting up a fund of up to 1 billion yuan ($148.47 million) to help manage the risks of third-party payment companies, such as Ant Group's Alipay and Tencent Holdings (OTC:TCEHY) Ltd's (HK:0700) WeChat Pay.

The People's Bank of China (PBOC) requires payment firms to hand in provisions from January 2019 to secure clients' money, which comes along with a quarterly interest.

Now it plans to take 9.5% to 12% of that interest into the fund, according to a statement released by the PBOC on its website.

The fund, with a cap of 1 billion yuan, will be used to resolve financial risks resulting from bankruptcies and insolvency of third-party payment firms, to maintain financial and social stability, the PBOC said.

PBOC will seek public opinion of the draft rules till Nov.13.

© Reuters. Man wearing a mask walks past the headquarters of the People's Bank of China, the central bank, in Beijing

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