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

FILE PHOTO: A man wearing a mask walks past the headquarters of the People's Bank of China, the central bank, in Beijing, China, as the country is hit by an outbreak of the new coronavirus, February 3, 2020. REUTERS/Jason Lee

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 Ltd's 0700.HK 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.

Reporting by Cheng Leng, Zhang Yan and Ryan Woo

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