Pawn Brokers Licence

The Pawn Brokers Statute No. 04 of 2014 of the Central Provincial Council provides the legal framework for regulating pawn broker businesses in the Central Province. It was amended by the Pawn Brokers (Amendment) Statute No. 01 of 2015 and the Pawn Brokers (Amendment) Statute No. 01 of 2016.

Registration and licence

Every person intending to operate a pawn broker business must apply for and obtain registration from the Commissioner of Revenue of the Central Province before commencing business.
A separate licence issued by the Commissioner of Revenue is required for each pawn broking business centre or branch. No person may operate a pawn broker business or branch without the relevant licence.
A licence cannot be transferred to another person without the prior written approval of the Commissioner of Revenue; any such transfer without approval is null and void.

Absence from Sri Lanka

A pawn broker who intends to remain outside Sri Lanka for more than three months must give written notice to the Commissioner of Revenue, nominate an eligible person to conduct the business during the absence, and obtain the Commissioner’s written approval for that arrangement.

Conduct of business

Business hours: articles must not be accepted on pawn before 8.00 a.m. or after 8.00 p.m.
No auctioneering: a pawn broker must not act as an auctioneer or carry on an auctioning business.
Notices: the name of the business, the licence registration number and the word “Pawnbroker” must be displayed at the entrance in Sinhala, Tamil and English, together with a notice of the particulars in the Second Schedule.
Languages: particulars entered in any book, form or document required by the Statute must be in Sinhala, Tamil and English.
Books: a Pledge Book (Form “B”) and a Sale Book of Pledges (Form “C”) must be maintained with clear, accurate and timely entries.
Pawn receipts: must follow Form “D” (original and counterfoil), with the Second Schedule particulars printed on the reverse in all three languages.
Interest: must not exceed the rate specified in the Second Schedule.
Insurance: full liability insurance must be maintained for the value of articles pawned and to be accepted on pawn.
Redemption receipts: on redemption, a receipt showing the loan repayment, interest and any taxes or charges must be issued and a copy retained.

Auction of unredeemed pledges

A pledge not redeemed within the redemption period may be disposed of only by public auction, in accordance with the Statute and the Third Schedule.
The Commissioner of Revenue must be notified of the date, time and place of the auction.
The pawner must be notified by registered post at least 14 days before the auction.

Suspicious transactions

A pawn broker may take action where a person offering an article fails to produce a National Identity Card, passport or driving licence; cannot satisfactorily explain how the article was obtained; gives false information; attempts to redeem a pledge they are not entitled to; or offers an article reasonably suspected to be stolen. The person and the pledge may be detained and handed over as soon as possible to a Police Officer or Grama Niladhari, following the procedure in the Statute.

Offences

Accepting articles from persons apparently under 16 years of age or intoxicated.
Accepting an article without issuing the required pawn receipt.
Purchasing or exchanging pawn tickets issued by another pawn broker.
Employing a person under 18 years to accept articles on pawn.
Purchasing pledges other than at an authorised auction, or disposing of pledges in an unauthorised manner.
Making false entries or failing to make required entries in the prescribed books.
Detaining persons without reasonable cause.
Failing to maintain the required insurance or to submit the annual accounts report to the Commissioner of Revenue.
Operating a pawn broking business without a licence, or otherwise contravening the Statute.
Knowingly accepting linen, apparel, unfinished goods or materials entrusted to a person for washing, repairing, manufacturing or finishing. A court may order such a pledge to be restored to its owner.