(Yicai Global) Nov. 24 -- Ant Financial Services Group, the financial services arm of Chinese internet giant Alibaba Group Holding Ltd. [NYSE:BABA], has imposed new requirements for merchants on its online financial platforms after credit-scoring service affiliate Zhima Credit ended partnerships with several cash loan platforms, reported Sina Technology.
The firm requires merchants not to charge annualized interest rates on products exceeding 24 percent in order to better protect consumer interests, according to an email sent to consumer finance partners.
The platform calls on its consumer finance merchant partners to conduct self-inspections and take corrective measures by the end of this month.
Alipay Shenghuohao is a service platform of Alipay that provides enterprises, organizations, and individuals with membership services for users.
“We found through spot checks that some merchants charge interest above statutory rates on products marketed on their accounts via Alipay Shenghuohao and have improperly conducted debt collection,” said the firm “The Shenghuohao platform will continue with inspections and shut down non-compliant merchant accounts.”
Ant Financial has conducted spot checks on non-compliant financial products offered by its partners across its platforms. Zhima Credit terminated partnerships with some cash loan platforms on Nov. 21.
It will continue to check merchants’ qualifications, products and services to help promote the healthy development of the industry and will immediately stop working with merchant it finds to have similar problems.
The crackdown on cash loans appears to be more intense than expected. Chinese regulators issued a notice immediately suspending approvals of new online micro-lenders on Tuesday. The ban also prevents recently-set up companies from carrying out cross-provincial, cross-district or cross-municipality micro-lending.
Several US-listed Chinese fintech firms have seen share prices slump as authorities prepare official regulatory policies. Shares in PPDAI Group Inc. [NASDAQ:PPDF], Qudian Inc. [NYSE:QD], Yirendai Ltd. [NYSE:YRD] and China Rapid Finance Ltd. [NYSE:XRF] dropped 24 percent, 16 percent, 4.7 percent and 5.94 percent, respectively, as of yesterday morning.