SINGAPORE - Pawnshops may soon have tighter regulations if the Pawnbrokers Bill is eventually passed.
In Parliament today, it is proposed that the $20,000 security deposit for pawnshops be raised to $100,000 for each branch.
The Straits Times reported that pawnshops will also have to maintain a minimum paid-up capital of $2 million for the first branch, and $1 million for each subsequent branch.
Additionally, pawnshops need to prevent money laundering by conducting stricter checks on their customers and reporting any suspicious transactions to the police.
As of 2014, the number of pawnbrokers have risen to 204 from a mere 57 in 1993. The total amount lent last year amounted to $5.5 billion, up from $856 million in 1993.
Under this new Bill, the current auction system will be abolished in a move to help lower costs for pawnshops. Presently, pawnshops are only allowed to sell unredeemed pledges through auctions, at the expense of high operating costs.