The Pawn Brokers Statute No. 04 of 2014 of the Central Province Provincial Council provides the legal framework for regulating pawnbroker businesses in the Central Province.

The statute was subsequently amended by:

• Pawn Brokers’ (Amendment) Statute No. 01 of 2015
• Pawn Brokers’ (Amendment) Statute No. 01 of 2016

Registration

 – Every person intending to operate a pawnbroker business must apply for registration and obtain registration from the Commissioner of Revenue of the Central Province before commencing business.

Obtaining the Licence

 – A separate licence issued by the Commissioner of Revenue is required for each pawnbroking business centre or branch.

 – No person may operate a pawnbroker business or branch without the relevant licence.

Transfer of licence without prior approval

 – A pawnbroker licence cannot be transferred to another person without the prior written approval of the Commissioner of Revenue.

 – Any transfer made without such approval is considered null and void.

Notice of Pawnbroker’s absence from Sri Lanka

 – A pawnbroker who intends to remain outside Sri Lanka for a period exceeding three months must:

• • • Give written notice to the Commissioner of Revenue of the intention to travel abroad; and
    • Nominate an eligible person to conduct the pawnbroking business on his or her behalf during the absence.

 – Written approval from the Commissioner of Revenue must be obtained for such an arrangement.

Business hours

 – A pawnbroker shall not accept articles on pawn before 8.00 a.m. or after 8.00 p.m. on any day.

Pawnbroker not to act as an auctioneer

 – A person carrying on a pawnbroker business shall not act as an auctioneer or conduct an auctioning business.

Notices to be exhibited by Pawnbroker

 – Every pawnbroker must clearly display, at the entrance of the business premises:

• • • The name of the business
    • The pawnbroker licence registration number
    • The word “Pawnbroker”

 – These details must be displayed in Sinhala, Tamil and English.

 – A further notice containing the particulars specified in the Second Schedule must also be displayed prominently at the business premises in all three languages.

Languages to be used in entering particulars

 – Where the statute requires information to be entered in any book, form or document, the particulars must be entered in Sinhala, Tamil and English.

Books to be kept by Pawnbrokers

 – Every pawnbroker must maintain and use:

• • • A Pledge Book in the prescribed Form “B”; and
    • A Sale Book of Pledge in the prescribed Form “C”.

 – All required particulars must be entered clearly, accurately and at the appropriate time, and necessary inquiries must be made in relation to the entries.

Pawn receipt

 – Every pawn receipt must be prepared and signed in accordance with the prescribed Form “D”, including both the original and counterfoil.

 – The particulars specified in the Second Schedule must be clearly printed on the reverse of every pawn receipt in Sinhala, Tamil and English.

Interest rate

 – A pawnbroker shall not charge interest on a loan secured by a pledge at a rate exceeding the rate specified in the Second Schedule of the statute.

Insurance Cover

 – Every pawnbroker must maintain full liability insurance coverage for the value of articles pawned and articles intended to be accepted on pawn in the future.

Receipt of Pawnbroker

 – When a pledge is redeemed, the pawnbroker must issue a receipt showing the amounts received, including:

• • • Loan repayment
    • Interest
    • Any applicable taxes or other charges

  – A copy of the receipt must be retained by the pawnbroker as required by the prescribed procedure.

Pledges to be sold by auction

 – A pledge that is not redeemed within the prescribed redemption period may be disposed of only through a public auction, in accordance with the requirements of the statute and the Third Schedule.

 – Before conducting an auction, the required notice and approval procedures must be followed. The Commissioner of Revenue must be notified of the proposed auction, including its date, time and location.

 – The pawner must also be notified by registered post at least 14 days before the auction, stating the date, time and place of sale.

Procedure to be followed when pawners do not give a good account of themselves

 – A pawnbroker may take appropriate action where a person offering an article on pawn:

• • • Fails to produce a National Identity Card, Passport or Driving Licence;
    • Cannot provide a satisfactory explanation of how the article was obtained;
    • Provides false information about ownership, name or address;
    • Attempts to redeem a pledge to which the person is not entitled; or
    • Offers an article which the pawnbroker reasonably suspects has been stolen or illegally obtained.

 – In such circumstances, the pawnbroker may seize and detain the person and the relevant pledge and hand them over, as soon as possible, to a Police Officer or Grama Niladari, following the procedure prescribed by the statute.

Offences by Pawnbrokers

 – The statute identifies various actions by pawnbrokers as offences. These include:

• • • Accepting articles from persons apparently under 16 years of age or who are intoxicated;
    • Accepting an article without providing the required pawn receipt;
    • Purchasing or exchanging pawn tickets issued by another pawnbroker;
    • Employing a person under 18 years to accept articles on pawn;
    • Purchasing pledges except through an authorized auction;
    • Making arrangements to purchase or dispose of pledged articles during the redemption period;
    • Selling or disposing of pledges other than in the manner authorized by the statute;
    • Making false entries or failing to make required entries in prescribed books;
    • Detaining persons without reasonable or justifiable cause;
    • Failing to maintain the required insurance coverage;
    • Contravening provisions of the statute;
    • Failing to submit the required annual accounts report to the Commissioner of Revenue; and
    • Operating a pawnbroking business without the required licence.

Prohibition of taking on Pawn linen clothing, unfinished goods

 – A pawnbroker must not knowingly accept on pawn any linen, apparel, unfinished goods or materials that have been entrusted to a person for washing, cleaning, ironing, repairing, manufacturing, working, finishing or decorating.

 -Acceptance of such articles knowingly constitutes an offence under the statute.

 – Where a court convicts a pawnbroker of such an offence, the court may also order the pledge to be restored to its owner in the presence of the court or in any other manner directed by the court.