1. Original provisions: According to Article 26 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases, if the interest rate agreed by both lenders and borrowers does not exceed the annual interest rate of 24%, the people's court shall support it. The interest rate agreed between the borrower and the borrower exceeds the annual interest rate of 36%, and the interest agreement in excess is invalid. The people's court shall support the borrower's request to the lender to return the interest paid in excess of 36% per annum.

2. New regulations: On August 20th, 2020, the Supreme People's Court promulgated the Regulations on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases, the core provision of which is to modify the original 24% legal protection clauses, and determine the upper limit of judicial protection of private lending interest rates based on the standard of four times the LPR issued by CFETS authorized by the People's Bank of China. According to the four times of the latest LPR interest rate of 3.85%, the upper limit of judicial protection of private lending interest rate is only 15.4%.

The announcement of the new regulations clearly points out that private lending is a civil subject other than financial institutions whose business is loans, so all licensed financial institutions (such as banks) are not applicable. Other non-financial institutions that focus on loans or other types of private lending are applicable.

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Reply time: 2022-0 1-29. Please refer to the latest business changes announced by Ping An Bank in official website.