The Bangko Sentral ng Pilipinas' (BSP) policy-making Monetary Board (MB) has approved a new supervisory framework for pawnshops to protect the public and ensure a more inclusive financial system.
BSP Governor Amando Tetangco Jr. told reporters Wednesday that the Board's decision was also aimed to strengthen the licensing process.
In a statement, the central bank said the new framework stressed importance on the fitness and propriety of the pawnshop operators, required pawnshops to adopt the applicable BSP regulations on financial consumer protection and instituted a limit on the borrowings of pawnshops to finance its operations to 19 creditors.
"However, the limit does not cover borrowings for purposes of acquiring fixed assets intended for business operations," it said.
Pawnshops are now required to disclose their effective loan interest rates and the policy on insurance of pawned items, maturity date and grace period.
In terms of licensing, the central bank said existing pawnshop operators were given one year from the date of effectivity of the new regulations to secure their license to operate since all Acknowledgement of Registration and/or Authority to Operate previously issued by the central bank would be considered revoked after the expiration of the transitory period.
Pawnshop operators were previously required to get BSP approval for the operation of new pawnshop offices but under the new rule they only need to inform the central bank about the establishment and operation of new offices
Source: Philippines News Agency