Credit reference agencies must seek consumers' consent before collecting their personal information and providing bad credit information about them, according to a new regulation made public on Tuesday.

The regulation, approved at an executive meeting of the State Council on Saturday, also stated that agencies cannot collect personal income information about individuals concerning their savings or real estate without letting the consumers know about possible consequences or attaining their authorization in written forms.

Personal information such as religion, fingerprints or medical history may not be collected. Credit reference agencies can only keep customers' poor credit information for five years, and must delete the information thereafter.

The regulation is China's first on the credit rating industry and will take effect on March 15.

It comes at a time when the central government and top legislature have stepped up efforts to protect personal information. China's top legislature approved rules to enhance the protection of personal information online and allowed individuals to take action against network information that discloses their identities or infringes upon their rights.

The regulation states that agencies collecting personal information through illegal means or without authorization from consumers or selling the information illegally will be fined 50,000 to 500,000 yuan ($8,000 to $80,000). The individuals held responsible will be fined 10,000 to 100,000 yuan.

Beijing News reported that previously, financial institutions such as banks were fined 30,000 yuan for collecting personal information illegally.

The regulation also stated that providers of information to credit reference agencies will also be fined if the information he or she provides caused a major problem.

China's credit reference market has begun to take shape in recent years, and the industry is lacking a universal standard and guidelines for supervisors, according to a statement released by the State Council's Legislative Affairs Office and the People's Bank of China.

Inside the industry, there has been inappropriate behavior, such as collecting the personal information of consumers through inappropriate means, or putting the information to illegal use.

It was also difficult to collect information of market entities at times, the statement said.

The regulation also set the bar for the industry, as it requires credit reference agencies to have a registered capital of 50 million yuan and major shareholders must have no criminal record from the last three years.

The regulation would apply to agencies that collect, compile and keep personal information and provide the information to users within Chinese territory. The PBOC and its outlets are the major supervisors of the industry.

It has become increasingly common for banks to collect clients' personal information by mistake or try to inquire about their personal information through illegal means, said Pan Gongsheng, deputy governor of the central bank, in a work conference on the credit reference of commercial banks earlier this month.

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