One of the main goals of the new regulation is to expand opportunities for pawns and protect the rights of its customers
The National Bank of Ukraine has published a white paper, which reveals SUS’s approach to future regulation of the pawn shop market. As stated on the National Bank website, one of the major goals of the new regulation will be to expand opportunities for pawns and protect the rights of people using their services.
What the National Bank wants to change:
- Responsibility of customers under loan agreements with pawns at the legislative level. Thus, if the borrower cannot repay the interest on account of using the loan, his loan at the pawn shop will be repaid at the cost of the pledge, without depositing additional onion requirements.
- To raise the level of informing customers about the terms of Lombard lending. So, it is considered likely to introduce a mandatory provision of a lumbar ticket to the customer or to establish additional requirements for a contract with the borrower, where the terms will be set in a concise and readable form.
- To provide facade workshops with cash currency exchange and opportunity to transfer funds without opening an account. In addition, Pawn workshops will be able to provide other services or perform other business activities that require them to provide financial services. Also, only the loan against the property will be required.
- To simplify the requirements for Pawn workshops regarding the premises and location of service, security, reporting and accounting of documents. As a National Bank Note, since pawn workshops do not attract public funds, the main type of supervision would be the supervision of market behavior, and the prevailing form would be on-site supervision.
NBU also plans to introduce other requirements for pawnbooks:
- At least 1 million UAH – maintaining capital at the level of 500 thousand UAH in the presence of separate divisions
- Establishment of increased or additional requirements for pawns, which will provide other financial services, except lending, at a level of at least 5 million UAH.
Apart from this, schemes of National Bank – To regulate and expand sources of financingIn addition, allowing individuals from legal entities and qualified investors to attract funds from affiliates and funds on the terms of subordinate debt.
According to the NBU website, the initiation of the change will require efforts from market participants, therefore, “the time to bring the pawn movements to new requirements is determined only after a detailed acquaintance with the market situation, the objective. Ability to meet the conditions of objectives and new requirements. “
Paypal magazine help
Earlier, we wrote that under the “split” law in Ukraine, the National Financial Services Commission’s market regulator of non-banking financial institutions is dismantled, and its powers are governed by the NBU and the National Securities Commission and the Stock Market (NKTSDFR ) Is distributed among. From July 1, 2020, the National Bank will start regulating not only banks, but also insurance companies, credit unions, pawn and other financial institutions except private pension funds.
Read: Cashless and Cashback: Top 5 Innovations in Pawn Workshops