China Banking and Insurance Regulatory Commission website reported on December 16 that the China Banking and Insurance Regulatory Commission recently issued the "Notice on Further Promoting the Standardized and Healthy Development of Credit Card Business (Draft for Comments)".
Source: China Banking and Insurance Regulatory Commission
Business philosophy, weak service awareness, inadequate risk control, infringement of customers' legitimate rights and interests... This kind of bank credit card chaos will be severely rectified!
Reasonably set the upper limit of the total credit limit for a single customer
The "Notice" points out that some banks are not cautious in credit management and control of credit cards, cannot rigorously evaluate the credit status of customers, resulting in excessive credit and other problems, increasing operating risks, and unreasonably pushing up the level of leverage of customers .
The "Notice" requires banks to reasonably set the upper limit of the total credit limit for a single customer credit card. When approving and adjusting credit limits, the accumulated credit limits of credit cards from other institutions should be deducted to prevent unreasonable overlapping of credit across banks. Dong Ximiao, chief researcher of
United Nations Financial , said that commercial banks should change their credit card business development model, from simply pursuing scale and speed growth to professional and refined high-quality development; they should reasonably approve credit limits, minimize the multi-credit , and strictly control excessive credit.
prohibits the superposition of installments on installments
The "Notice" requires that installment business should set up prior independent application, approval and other links, and should not be confused or bundled with other credit card business contracts (agreed). The balance of funds that have been processed in installments shall not be processed again, except for the personalized installment repayment agreement stipulated by the supervision. Banks should clarify the minimum starting amount and maximum amount limit for installment business. The installment business term shall not exceed 5 years. If a customer really needs to apply for installment repayment for the advance cash loan business, the amount shall not exceed RMB 50,000 or the equivalent value may be freely exchanged for currency, and the term shall not exceed 2 years.
shows the annualized interest rate level to customers in an obvious way
The "Notice" requires banks to strictly fulfill their warning or explanation obligations for the collection of interest, compound interest, fees, liquidated damages and other terms and risk disclosure content when entering into a credit card contract with customers, and to show the annualized interest rate level to customers in an obvious way. Except for cash withdrawal business, the total amount of interest and fees charged to customers who default or have not repaid overdue shall not exceed their corresponding principal.
For installment business, the "Notice" specifically requires banks to clearly display all interest and fee items, annualized interest rate levels and interest and fee calculation methods that may arise in the installment business on the homepage of the installment business contract (Agreement). When showing the cost of using funds collected for installment business to customers, the interest shall be adopted in uniform form and shall not be adopted in the form of handling fees, unless otherwise provided by laws and regulations. If a customer settles credit card installment business in advance, the bank shall collect interest based on the actual amount of funds occupied and the term.
At the same time, the "Notice" clearly states that banks should scientifically determine the level of credit card interest fees, continue to take effective measures, and resolutely promote the reasonable decline in the level of credit card interest fees.
"A very important principle and premise in credit card price management is to clearly mark prices and pre-disclosure. The overall direction is to bring lower cost and more convenient financial product to the people." said the head of the relevant department of the China Banking and Insurance Regulatory Commission.
Long-term sleep credit card ratio shall not exceed 20%
The "Notice" requires banks not to directly or indirectly use the number of card issuances, number of customers, market share or market rankings as single or main assessment indicators.
strengthens dynamic monitoring and management of sleep credit cards. The number of long-term sleep credit cards with no active transactions for more than 18 consecutive months and the current overdraft balance and overpayment payments of is zero shall not exceed 20% of the total number of card issuances of this institution at any time, except for credit cards with additional policy functions. Banks exceeding this proportion are not allowed to issue new cards. In the future, the China Banking and Insurance Regulatory Commission will also dynamically lower the limit on the proportion of long-term sleep credit cards, and continuously urge the industry to reduce the proportion of sleep card to a lower level.
In addition, the "Notice" also lists marketing prohibited behaviors such as default checking and compulsory bundling, and clearly stipulates that no person shall engage in the institution's credit card issuance marketing activities without the unified qualification certification within the bank.
shall not collect debts for third parties not related to debts
The "Notice" requires that banks shall establish a review system and a working mechanism for consumer rights protection. Fully disclose the risks of card use, complaint channels and unbundled procedures, and ensure that sales behavior is traceable. Customer data security management should be strengthened and cooperation should not be carried out with institutions that violate the law and regulations on data processing. Banks are required to implement the main responsibility for collection management and shall not collect collections from third parties that are not related to debts.
handles the core business link of credit card through self-operated online platforms
The "Notice" requires banks to formulate clear access and exit standards and management approval procedures for cooperative institutions, and implement list management. The core business links of credit cards should be handled through self-operated online platforms to ensure that the creditor-debtor relationship is clear and accurate. Concentration indicators are set for banks to issue cards through a single cooperative institution and credit balance respectively. The joint unit that cooperates in issuing joint cards should be a non-financial institution that provides customers with their main business services. The cooperation content is limited to the joint unit's advertising promotion and rights and interests services related to their main business.
The aforementioned person in charge introduced that some institutions that provide financial services use the form of a joint card to combine two types of financial services or products into a credit product under the name and framework of the joint card. This product causes confusion for cardholders to accurately identify the creditor-debtor relationship, the creditor's subject, interest and fee plans, etc. Co-branded cards should return to their original nature and provide cardholders with other non-financial equity services and functions based on credit cards.
The "Notice" clearly states that in accordance with the principles of controllable risks, safe and orderly, innovative models such as online credit card business will be explored through pilot projects and other methods.
Edited by: Yu Hongbo
