With growing concerns and discussions on the surging of micro-loans, Chinese regulators decided to cool down the market by suspending regulatory approvals, drawing down shares of US-listed Chinese financial firms in the business. 

Operating under the People's Bank of China (PBOC), the country's central bank, the Internet finance risk management work group issued an urgent notice to provincial governments, demanding them to suspend approval of founding web-based micro-credit companies as well as of running micro-loan business cross regions, newspaper National Business Daily reported on Wednesday, citing an anonymous source familiar with the matter. 

Shares in Chinese leading online lender Qudian, which had been the biggest US listing by a Chinese fintech firm this year, plunged about 20 percent late Tuesday after the media reports about approval suspension. 

Qudian, which is backed by Alibaba Group's affiliate Ant Financial, became profitable last year and went public at 24 US dollars per share, raising about 900 million US dollars in an IPO in October. 

The micro-loan lender, which was founded in 2014, reported more than threefold year-on-year growth in both revenue and profits in the third quarter. 

Other US-listed China’s web-based lenders saw similar sinks in share price. 

On Tuesday, shares of China Commercial Credit Inc were down 8.4 percent and PPDAI Group was down 17.1 percent. Shares of Jianpu Technology, which also debuted just this month, were down 18.8 percent. China Rapid Finance’s shares dipped 0.9 percent.

China’s payday loans business, from which poor-credit borrowers can obtain loans quickly without thorough background checks, sees explosive growth with high profitability, partly due to loose regulation. 

However, the high-interest rate and strong-armed debt collection have triggered public doubts and even led to several borrowers’ suicides. 

Read more: Debt regulation urgent after payday loan suicides

Therefore, a set of more specific regulations and implementation have been expected to cool down the overheated industry and to control the risks caused by large-scale multiple borrowing.