China will soon come out with guidelines for the healthy development of the Internet finance sector, a top banking official said on March 4.

Pan Gongsheng, deputy governor of the central bank and a member of the National Committee of the Chinese People’s Political Consultative Conference, said that the People’s Bank of China, the nation’s central bank, will play a leading role in formulating the guidelines and also establish a regulatory framework for the Internet finance sector.

The upcoming regulations have sparked interest among members of the CPPCC National Committee this year as Internet financial products and services have grown rapidly in China.

China has already become the world’s largest peer-to-peer lending market. By the end of September 2014, about 1,400 peer-to-peer lending platforms had raised funding of 110 billion yuan ($18 billion). The total assets of Yu’ebao, an online monetary fund operated by the Chinese e-commerce giant Alibaba Group Holding Ltd, amounted to 578.9 billion yuan at the end of last year.

With the fast development of Internet finance, the existing regulation system, which relies mainly on administrative regulation, can no longer cater to the growing demands of the financial sector, He Qiang, a professor with the Central University of Finance and Economics, said in his proposals to China’s top advisory body this year.

The ongoing financial reform must move toward strengthening market regulations to unlock the full potential, said He, who is also a member of the CPPCC National Committee.

“The government should make a scientific risk assessment system for Internet finance based on quantitative indicators, rather than calling off financial products and services simply because they may cause relatively high financial risks,” he said.

For innovative financial products with large volume, he suggested that the government should consider the relevant financial institution’s ability to control and handle the risk, instead of tightening regulations due to possible negative effects associated with such products.

The central committee of the China Zhi Gong Party, one of the country’s eight non-Communist parties, made a proposal to the CPPCC National Committee, urging the authorities to put the various types of Internet financial products and services under the financial regulatory framework of the central bank, the nation’s banking, securities and insurance regulators as well as local financial bureaus.

Pan from the PBOC said during an Internet financial forum in November that the central bank would adopt an open and tolerant stance while designing the regulatory framework. The PBOC will leave certain space for the development of Internet finance while drawing the bottom line clearly, he said.

Zhang Daosheng, a spokesman for Zhejiang Ant Small & Micro Financial Services Group Co, an affiliate of Alibaba, told China Daily on March 4 that any serious player in the Internet finance sector would love to see detailed regulations for the sector.

“Regulations and policies are used to guide the development and direction of the entire sector. We would be happy to know the dos and don’ts,” Zhang said.

Peng Lei, chief executive officer of Ant Financial, said in February that her company is “embracing supervision”. Peng, whose Ant Financial runs Alipay, China’s largest online payment tool, said the size of the company requires it to keep improving its risk control ability and communication skills with supervisors to secure more room in innovation.

She said Ant Financial will open its system to the central bank and other authorities so that they will know its data in real time.

Contact the writers at jiangxueqing@chinadaily.com.cn and mengjing@chinadaily.com.cn