Central bank clips wings of P2P firms

Per-to-peer, or P2P, lenders in China will henceforth function only as intermediaries and cannot raise funds on their own, the People's Bank of China said on Saturday.

Releasing fresh guidelines for the sector, the PBOC said: "P2P lending companies will serve only as intermediaries between lenders and borrowers and cannot 'enhance borrower creditworthiness' by raising funds of their own to lend."

P2P lending, often done without a traditional financial intermediary such as a bank, transaction volumes almost doubled during the first six months of the year with average annual returns of about 15 percent, according to data from wangdaizhijia.com, an online lending information and exchange platform.