PAWNBROKERS (AMENDMENT) BILL

Order for Second Reading read.

10.10 a.m.

The Assistant Minister, Chief Secretary's Ministry (Mr M. P. D. Nair): Sir, I rise to move, "That the Bill be now read a Second time."

For a good number of years the practice of issuing licences to pawnbrokers in Singapore has been based on a three-year tender system. Normally the highest bidder is successful and pays a monthly rental equal to his 'bid' which depends on the locality of the business and the number of competitors for the licence. The fees range from $6,000 to $56,000 a year. In 1955, realising that the system was out of date and needy of change, Government appointed a Committee to review the system and to make recommendations for a new one and to draft any necessary legislation. The Committee's findings and the Government's White Paper on it which has accepted the main recommendations, were published and presented as Sessional Paper No. Cmd. 62 of 1956.

Sir, since the publication of this White Paper, several letters have been received in my Ministry as well as in the Chief Minister's Office indicating a general acceptance of the recommendations of the White Paper. The Bill is the culmination of the investigations instituted, and it sets out to amend the Pawnbrokers Ordinance (Chapter 195) so as to incorporate such of the recommendations of the Committee which have been accepted by Government.

The main object of the Bill, Sir, is to establish a Pawnbrokers Licensing Board responsible generally for the regulation of the pawnbroking business and particularly for the consideration annually of applications for licences, for the issue, refusal and cancellation of licences, and for the receipt of fees and monthly returns from licensees. The constitution of the Board, the definition of the scope of its duties, the conditions subject to which licences may be granted, recourse to the Minister for persons aggrieved by the Board's decisions, and the duties of the pawnbrokers in respect of pledges remaining in their custody after the determination of their licences, are all matters provided for in clause 3 of the Bill.

The proviso to section 9 (1) (c), Sir, proposed by clause 3 of the Bill, safeguards the banking business which is commonly conducted by pawnbrokers in Singapore as a sideline.

Clause 4 of the Bill provides that pawnbrokers may be required to make monthly returns to the Board in accordance with rules made under section 45 of the Ordinance. Such returns would be of value in determining, for instance, the extent of the community's dependence on the services of the pawnbrokers.

Clause 5 of the Bill amends section 24 of the Ordinance so as to simplify the calculation of a pawnbroker's liability in respect of pledges destroyed or damaged by, or in consequence of, fire.

Clause 6 of the Bill amplifies the provisions of section 45 of the Ordinance, defining the purposes for which rules may be made under this Ordinance.

Clause 6 (e) of the Bill provides for rules for the procedure to be followed by applicants and the procedure and proceedings of the Board.

Clause 7 of the Bill introduces an amended schedule of profits allowed to pawnbrokers. The new schedule provides for a maximum rate of interest of two per cent per month.

Clause 8 of the Bill is designed to make amendments passim to provisions in the Ordinance which require to be brought up to date in reference to the amount of loans and to the maximum fines that may be imposed for offences under the Ordinance, and other amendments resulting in the constitution of the proposed Pawnbrokers Licensing Board which replaces the existing Licensing Authority.

While clause 3 of the Bill provides the basis for the procedure and proceedings of the Board and that of applicants and applications, regulations are being framed to make more specific provisions in these respects, especially in regard to reference to departments, advertising of applications, notice of objections from the public and departments, fees for licences, and display of licences.

Clause 8 (1) of the Bill provides for the fee to be prescribed by the Governor in Council and this will be done under the regulations which are being made. Neither the Committee's Report nor the White Paper has provided for any basis of classification or the scale of fees. However, it has been the view that the fees collected should not be looked upon as a revenue measure but as a means of covering the cost of the administrative system. It is proposed, Sir, to have classifications and fees as shown below. Classification Fee per annum $ Pawnbrokers "A" Class - pawnbrokers with an investment of $50,000 to $1,000,000 250 Pawnbrokers "B" Class - pawnbrokers with an investment of $20,000 to $50,000 150 Pawnbrokers "C" Class - pawnbrokers with an investment of $5,000 to $20,000 100

It is felt, Sir, that the above will be acceptable both to Government and the pawnbrokers. Sir, I beg to move.

Question proposed.

10.17 a.m.

Mr D. S. Marshall (Cairnhill): Sir, I am happy to be able to support this measure which is the result of a thoroughly workmanlike report of public-spirited gentleman who sat on this commission to enquire into means of changing a colonial monopolistic system that sought through commercial concerns to tax the poorest people in the country. This Bill is perhaps a little late, but otherwise I think that every citizen should welcome it, particularly as now it provides for the lessening of interest rates in view of the fact that the pawnbroker does not have to pay those exorbitant fees which he was called on to pay in the past.

Mr Lim Koon Teck (Paya Lebar): Mr Speaker, Sir, we are happy to support this Bill and we are glad to know that at last this Ordinance, which has been in operation for many years with many loopholes, is being amended today, particularly more so when the interest rate charged by the pawnbrokers now is to be limited to two per cent per month.

Question put, and agreed to.

Bill accordingly read a Second time.