(Yicai Global) Dec. 18 -- Members of the public will no longer be able to deposit funds with banks that use Alipay, the world’s largest mobile payment platform run by China’s Ant Group, as the fintech giant moves to better align its business with regulatory requirements, The Paper reported today.

This will not affect those who have already deposited money, it added.

In the past two years, a number of small and medium-sized local banks have become national ones by using third party financial platforms such as Alipay to gather funds from across the country. By offering high interest rates for short-term deposits from as little as CNY50 (USD7.64), they are able to quickly accumulate capital to relieve liquidity pressure.

However, regulations stipulate that local banks such as rural commercial banks should focus on serving their home turf.

It is very important to clarify which types of banks can and which cannot run such a business, Sun Tianqi, head of the financial stability bureau at the People's Bank of China, said last month.

Online deposits are different from traditional savings deposits. Operating thresholds should be set based on regulatory ratings, business conditions, capital reserves and risk management capabilities, he added.

Ant was forced to shelve its much-anticipated initial public offering on the Hong Kong and Shanghai stock exchanges last month after risk-averse regulators stepped in to rein in the sprawling fintech sector, greatly altering the Hangzhou-based firm’s earning potential.

Ant will abide by all rules and regulations. It will embrace stable innovation, supervision, service to the real economy and openness for mutual benefit, it said.

More than 50 banks offer deposit services on 11 internet platforms, Sun said. Most of these accounts hold less than CNY500,000 (USD76,438) each.

Internet giant Baidu’s Du Xiaoman Financial and e-commerce behemoth JD.com’s JD Finance are still offering bank deposit services, the 21st Century Business Herald reported.

Editor: Kim Taylor