Alibaba Finance Group Submits Banking License Proposal to PBOC
BY ALEX HSU
A source close to the matter said that Alibaba Finance Group has submitted a proposal to the People’s Bank of China (PBOC) for a license to set up an online bank. The PBOC is the central bank of China and has the authority to control monetary policy and regulate financial institutions in mainland China.
Alibaba Finance Group is a new entity that is owned in part by Alibaba Group and other individuals such as Alibaba’s founder, Jack Ma.
The license will allow Alibaba to operate a business that includes deposits, loans and remittances.
Alibaba Finance Group’s registration was for over CNY 1 billion CNY (USD 163 million) and will be filed in Shanghai or Wenzhou in light of favorable regulatory conditions. The company will focus on small accounts and transaction amounts, though it is anticipated that these small transactions will add up quickly. Alipay’s online sales of money market funds, for example, have already surpassed CNY 50 billion (USD 8.17 billion).
The proposal for the license was submitted to the PBOC on September 6. The source states that, “The official [in charge of] supervising the license approval is ’cautiously supportive.’ However, it will take a long time to win the approval and [the process] involves a few different ministries.” The source also said, “There is a reform plan regarding the rules on allowing private capital to establish an institution in the banking industry. The plan is expected to be announced by the Communist Party during November’s conference.”
A spokesman for Alibaba Group declined to comment on the matter until further information is available.