The banking industry continued to strengthen its control over the flow of credit card funds. Recently, Agricultural Bank Of China Limited(601288) announced that in order to further regulate the use of credit card funds, according to relevant regulatory requirements, the bank will gradually close credit card tobacco withholding transactions from March. Other transactions of credit cards held by users are not affected and can be used normally.
Previously, the Agricultural Bank of China had conducted limit management on the transactions of tobacco merchants, and the closing of the transaction meant that the control was further tightened. In fact, this is not an isolated case in the banking industry. Prior to ABC, Shanghai Agricultural commercial bank, Postal Savings Bank Of China Co.Ltd(601658) , China Construction Bank Corporation(601939) etc. issued similar notices last year to restrict relevant business transactions.
For example, Shanghai Rural Commercial Bank announced that in order to ensure the safety of credit card funds and standardize the use of credit card funds, it will control the transactions of credit cards in some categories of merchants. Credit card overdraft funds shall be used in the field of consumption and shall not be cashed out or used in non consumption fields such as production, operation and investment, including but not limited to real estate (house purchase, parking space), securities investment, financial management and other prohibited fields.
Specifically, the bank will close the credit card transactions of merchants with category codes of 6012 (Financial Institutions – goods and services), 6211 (securities companies), 6051 (non-financial institutions – bills of exchange and non-electronic transfer) and 7995 (lottery sales) from August 1, 2021. For merchants with category codes of 5039 (building materials wholesale) and 4458 (tobacco distribution), a single transaction limit of 50000 yuan (inclusive) will be adopted. A single transaction limit of 100000 yuan (inclusive) shall be adopted for merchants with category code of 5998 (other wholesale).
Postal Savings Bank Of China Co.Ltd(601658) issued a notice on closing credit card tobacco withholding transaction and MCC 4458 transaction last year, saying that credit card tobacco withholding transaction and MCC 4458 tobacco wholesale transaction will be officially closed from March 31, 2021. The so-called MCC code, also known as merchant category code, is set by the acquirer for the special merchant to indicate the UnionPay card trading environment, the main business scope and industry ownership of the merchant.
CCB has also issued the announcement on strengthening the control of non consumer transactions of credit cards, which clearly requires that the bank’s credit cards shall not be traded in domestic real estate merchants (merchant category codes include 1520, 1771 and 7013) and real estate tax merchants; At the same time, the daily cumulative transaction amount of domestic life insurance merchants shall not exceed 100000 yuan; The annual cumulative transaction amount of credit cards of domestic tobacco business merchants shall not exceed 1 million yuan.
It can be seen that the bank’s control over the flow of credit card funds involves many industries, including tobacco, real estate, etc. In recent years, the rapid development of bank credit card business has played an important role in facilitating people’s payment and daily consumption. However, it should be noted that some bank credit card businesses have extensive business philosophy, weak service awareness, inadequate risk control, and infringe on the legitimate rights and interests of customers.
This is also intuitively confirmed by the data. According to the data disclosed recently by the regulator, in the fourth quarter of 2021, 44968 complaints involving credit card business were received and transmitted by the CBRC and its dispatched offices, an increase of 1.3% month on month, accounting for 49.6% of the total complaints.
Among them, among the complaints involving large state-owned commercial banks, there were 14037 complaints about credit card business, a decrease of 2.3% month on month, accounting for 50.6% of the total complaints of large state-owned banks; Among the complaints involving joint-stock commercial banks, there were 25756 complaints about credit card business, an increase of 1.0% month on month, accounting for 78.0% of the total complaints of joint-stock banks.
In the view of insiders, it is necessary to strengthen the supervision and control of credit card transactions, especially in the flow of credit funds. Combined with the previous announcements issued by banks, the restricted areas are usually real estate, tobacco, securities, wholesale of building materials, lottery sales, etc.
At the end of last year, the notice on further promoting the standardized and healthy development of credit card business (Draft for comments) (hereinafter referred to as the draft for comments) formulated by the CBRC also clearly mentioned the need to strictly control the flow of funds. On the one hand, banking financial institutions should take effective measures to timely and accurately monitor and control the actual use of credit card funds. Credit card funds should not be used to repay loans, investments and other fields, and it is strictly prohibited to flow into policy restricted or prohibited fields.
On the other hand, the exposure draft also requires banking financial institutions to strengthen the monitoring and analysis of different common card behaviors such as cash out and swiping, continuously optimize transaction monitoring rules, improve early warning ability, and continuously and effectively prevent and control all kinds of fraud risks. Complete record and preserve credit card transactions and other information according to law, and continue to meet the requirements of supervision and inspection of financial regulatory authorities and investigation and evidence collection of judicial organs in China. For customers who are confirmed to have cash out behavior, banking financial institutions shall immediately take effective restrictive measures to control the capital risk of credit card.
