(Yicai Global) March 6 -- China has formulated preliminary supervisory regulations to redress the problem of the refund of security deposits for bike-sharing services, cnr.cn reported.

"As some enterprises have not returned users' deposits after exiting the market, the Ministry of Transport (MOT) has paid great attention to this problem. The ministry has advanced a set of preliminary supervisory measures for deposits and prepayment following an investigation with other agencies like the People's Bank of China and the China Banking Regulatory Commission. These regulations will next be published and implemented after their approval in accordance with procedure to ensure the security of people's funds," said Yang Chuantang, the secretary of MOT's Party Group.

To avert deposit risks, in August last year, the Guiding Opinions on Encouraging and Regulating the Development of Internet Bike Leasing Business jointly published by several departments offered three measures. First, these guidelines encourage companies to offer services under deposit-free models like credit ratings. Second, they must achieve pay-down and immediate-refund models as soon as possible, to decrease the size of funds raised through deposits and prevent the formation of capital pools. Third, they direct that companies open dedicated escrow accounts exclusively for users' deposits and prepayments and submit to supervision of these, Yang said.