HONG KONG: China has slapped hefty penalties on the country's two digital payments giants, Tencent and Alibaba (NYSE:BABA), as part of its regulatory crackdown that began a couple of years ago.Tencent, along with its payments subsidiary Tenpay, has been fined approximately 2.99 billion yuan ($410 million) by the People's Bank of China.

Tencent said it has received a notice from the People's Bank of China regarding its decision to impose a fine in the amount of approximately 2.99 billion yuan "on Tenpay for its past regulatory breaches in relation to the provision of payment services in the mainland of China".

"The company believes the financial regulators will focus on normalised regulation going forward, implementing financial policies and measures to promote the healthy development of the platform economy, and supporting and encouraging platform companies to continue their efforts in financial inclusion," it said in a statement.

Tencent said that as Tenpay has completed its self-inspection and corresponding rectification work, and the operational compliance capability of its payment business has been enhanced, "the company considers that the Decision does not have any material adverse impact on the operations and financial position of the Group as a whole".

China's central bank also announced to slap a 7.123 billion yuan (around $1 billion) fine on Ant Group, the fintech affiliate of Alibaba.

Ant Group was fined "for a range of illegal activities, including those concerning corporate governance, consumer protection, banking and insurance, payments and settlement, anti-money laundering practices and fund sales," reports TechCrunch.

In March, reports surfaced that Chinese tech giant Alibaba was planning to split the company into six business units, and each unit will explore fundraising or IPOs (initial public offerings).

During the past couple of years, Alibaba has faced slowing economic growth at home and tougher regulation from Beijing, which caused its share price to fall by billions.

"The move is designed to unlock shareholder value and foster market competitiveness," Alibaba was quoted as saying.

Alibaba founder Jack Ma, who has rarely been seen in public in the past years, resurfaced a couple of times this year. He has kept a low profile since criticising China's financial regulators in 2020.

In late 2020, China called off Ant's initial public offering, which would have become the largest IPO in history.