Pawnbrokers Bill

Mdm Speaker, I stand in support of the Bill. I do have a few clarifications to make: firstly, pertaining to the Removal of the Auction Process. Currently, the public auction process is the only transparent part of the transaction and interaction with pawnbroking, in addressing unredeemed pledges. Due to this, any excess, over and above the interest, auction and administrative fees, may be returned to the pawner. Scrapping the auction process will also not likely be able to ensure pawners lower interest rates or higher loan-to-valuation ratio, as it may be intended to. One of the main reasons for this is that offers may vary quite significantly among different pawnbrokers in practice.

Secondly, in clause 21, it is stated that the "licensee must not carry on the business of pawnbroking at any place other than the licensed place of business". Can the Minister please help us understand the underlying reasons for this and also clarify if the pawnshop owner is allowed to meet and perform transaction with their clients outside their shops, for example, meeting their clients, usually their regular clients, outside their business premises?

Thirdly, in Part 3, clause 48, it is stated that "a pawnbroker must, before taking goods in pawn, give the person offering to pawn the good a valuation of the goods offered to be pawned". As we are reviewing this business, can I ask the Ministry if the wide variations that will be obtained on such valuations be acceptable? This is because current valuation details do not adequately identify the items, especially jewellery items. They may not reflect the prevailing market value and thus the quotes may vary as well. Perhaps, the use of better descriptors or photography may be considered. This will also help us get evidence, to ensure the exact same item is sold as unredeemed pledges, after the period of expiry.

Fourthly, Madam, there is mention of the pawnbroker providing ongoing programmes to train employees on policies and procedures with reference to Part 5, clause 74. Can I enquire if the Ministry will assist in centralising some such training, for example, under WDA? This can certainly help with standardisation and maintenance of a certain quality of the training provided as well. It is also a step to help enhance the practices of the people involved in the industry.

Fifth, on the changes related to the licensing of pawnbrokers, some that I had spoken to have requested briefing and explanation on the various classes and eligibility, as well as requirements. In the same context, can I also clarify with the Senior Minister of State if there are any Islamic pawnbroking businesses in Singapore currently and, if so, will they be briefed

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separately as well?

Madam, I support the removal of the statutory declaration as many who are involved in the transactions are our senior citizens and they really do not understand and are unfamiliar with the complex processes and the algorithms they have to go through.

All in all, Madam, I feel that it is good to have some structure and regulation introduced into this industry. After all, it is also about protecting the pawners and upholding their rights. I support the Bill.

This Bill seeks to update the Pawnbrokers Act which was last amended in 1993. Amongst others, it removes the existing auction system, requires pawnbrokers to provide an indicative value of a pledge to the pawner at the point of pawning and at the end of the redemption period; and raises the minimum paid-up capital of pawnbrokers for the first outlet and for each subsequent branch. Mdm Speaker, I support the Bill. I am concerned though about the rise in the number of pawnshops and in the total value of pawnbroking loans in recent years.

The number of pawnshops has grown from 114 in 2008 to 217 as at June last year. The value of pawnbroking loans rose more than three times, from $2 billion in 2009 to a peak of $7.1 billion in 2012. Many of the pawnshops are in the HDB heartlands. In an earlier Parliament reply, we were told that HDB does not generally limit the number of shops of each trade and leaves it to market forces to determine the trade mix of shops, including for pawnshops.

Market forces have, indeed, led to the rise of the pawnbroking industry. In our geographically small island state with some 217 outlets, access to pawnshops for a quick loan is easy. This has prompted some journalists to cast the spotlight on our pawnbroking industry which now has three publicly-listed pawnbrokers as key players in the market. A Bloomberg report in June last year titled "Rolex for casino cash fuels Singapore pawnshop growth" highlighted stories and statements by industry players about the rise in pawnbroking activities driven by gambling. The report, as well as other reports, also pointed to soaring living costs as another reason for Singaporeans to turn to easy credit sources, such as pawnbrokers, to cover their living expenses.

Mdm Speaker, there is very little data available on the profile of pawners. The Ministry has said that it does not track the reasons for non-redemption of pledges. While the overall percentage is small at 5%, 5% of four million valuables pawned in 2012 works out to around

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200,000 items that were unredeemed and had to be sent for auction. We do not know the reasons. We do not know how many of these 200,000 items were from pawners who repeatedly failed to redeem their valuables. We also do not know the reasons for these non-redemptions. I would like to call for a more detailed study on the profile of pawners and on the industry. In particular, we should look at those who do not redeem their valuables, to understand the underlying reasons. In order not to become a society with excessive pawning, the study can also look into the appropriate number of outlets in each neighbourhood, and whether the level and content of advertising should be subjected to some form of controls. I believe better data would be helpful to help look into the underlying causes of the rapid rise in the pawnbroking trade and how we can tweak the Pawnbroker's Bill in future to continue to keep pace with this industry's changing landscape.

Mdm Speaker, it was revealed in July last year the number of pawnshops grew to 204 from 163 in 2010 and the pawnbroking loans granted last year was $5.5 billion. In the same period, 95% of the pledges were redeemed. It is, indeed, a very lucrative business for the pawnshop industry.

The Pawnbrokers Bill provides the legislative basis for regulating pawnbrokers in Singapore with updated laws governing the pawnbroking industry to ensure they remain relevant, keeping pace with changes in the moneylending and financial industry in general.

MinLaw has proposed further amendments to the Bill, such as removing the auction system, improving protection for pawners, strengthening governance of the pawnbroking industry and updating technical changes to various provisions in the Act.

I support the Bill generally but wish to seek clarifications and make proposals for the Minister to consider. Can the Minister clarify why there is a need to remove the existing auction system when there were only 5% unredeemed pledges last July? How does it result in cost savings for pawnbrokers to benefit pawners through getting a higher valuation upfront from the pawnshops?

Clause 61(1), under forfeiture and effect, I would also like to propose for the Minister to consider giving a longer extension period of three months from the date of the notice to redeem their pledge before pawnbrokers take action. It is only fair the pawners be given time to find a way on how to redeem their pledge as these belongings may have a lot of sentimental value and attachment to them, some of which items cannot be duplicated in the market and would be lost forever. In the old days, I would see women crying when they lose their valued belongings, for example, a heavy gold bangle given as a dowry, just because of

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their inability to redeem them.

Pawnbrokers will be required to provide an indicative valuation of a pledge to a pawner twice – at the time of pawning and at the end of a redemption period. I would like to propose that pawnbrokers use the service of a certified gemologist or a certified valuer to give a fair appraisal of the valuation of the pledge for optimal value, which is also a service to the public.

Pawnbrokers are required to maintain a minimum paid-up capital of $2 million for their first branch, and an additional $1 million for every subsequent branch. The security deposit which licensees are required to furnish is $100,000. Could I ask the Minister, does the Bill also mandate insurance cover against burglary or fire within the pawnbrokers' premises for storage of pledges?

Will the interest rate be capped lower than the 1.5% per month after the removal of the existing auction system, as pawnbrokers are likely to pass on the resultant cost savings which may be in the form of lower interest rates?

Finally, will the Minister consider introducing online pawnbroking, as done in the US since 2009?

Madam, we have an online gambling Bill, but should there be another schedule for online pawnshops under the Pawnbrokers Bill in future?

Thank you, Mdm Speaker. The new Bill comes on the back of recent developments to Singapore's pawnbroking scene. The industry now has a softer image. New pawnshops are modern, brightly-lit and inviting – a sea change from the intimidating grilled storefronts some of us will recall. Pawnbroking is also on the rise. I will not recite or repeat the statistics that have been recited in this Chamber but, clearly, the business is booming.

Is this something we ought to be concerned about? Arguably, pawnbroking loans, being secured loans, pose less of a risk to the customer or pawner. The pawner cannot borrow beyond his means as he is limited by the value of the collateral. Also, should he be unable to make repayment, he forfeits the pawned goods and that is the end of his debt. There is no danger of the debt snowballing and affecting his other assets. Yet, we should not overlook the fact that there may be troubling reasons why more are seeking quick cash or short-term loans. More could be under financial strain, forcing them to pawn their belongings to make ends meet. Or, credit may be too difficult to obtain from moneylenders and financial

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institutions. Accordingly, I would like to ask the Ministry whether the Ministry has data explaining the surge in pawnbroking activity. Also, what is the Government doing to monitor the situation?

Moving on to the specifics of the Bill, I would like to raise several points for consideration and clarification.

The first has to do with the removal of the auction system. The intention behind this is to enable cost savings to be passed on to pawners. However, one consequence of this change is that pawnbrokers are no longer obliged to return any surplus from the realisation of the pledge to the pawner. Instead, they keep the surplus. That being the case, pawnbrokers may be incentivised to give unfairly low valuations because any surplus goes straight into their pockets. To some extent, competition between pawnbrokers for business may reduce such practices. Still, there is a danger that low valuations may become an industry-wide phenomenon, erasing the intended cost benefit to the pawner. What are the measures in place to ensure fair business practices?

Further, it appears from the proposed section 48(3) and section 62(2) that a pawner or third party who has suffered loss can claim against the pawnbroker if it is shown that the pawnbroker did not act in good faith or did not take reasonable care in giving the valuation. Can the Minister clarify what this means and how this may be demonstrated?

My second point concerns section 60. If the pawnbroker loses or damages the pawned goods, the pawner is entitled to be compensated with reference to the valuation at the time it first took possession of the pledge and that is set at section 60(5). However, the value of the goods may have increased or decreased since the point of pawning. Concerns of fair valuation aside – keeping in mind the incentive to give low valuations – surely, the loss suffered by the pawner is more accurately represented by the goods' valuation at the point of redemption. After all, this is the value of the goods the pawner would have received had it not been for the pawnbroker's default. This provision also lends itself to abuse. Where the value of the pawned goods has risen – say, in the case of gold bar or jewellery – an unscrupulous pawnbroker may pretend to misplace the goods and then later sell them off. The pawnbroker benefits from doing so as it only compensates the pawner the amount of the valuation at the point of pawning. In view of this, could the Minister explain the rationale behind section 60(5)?

Next, a similar complication arises under section 65. This section governs the pawnbroker's wrongful realisation of the pledge. Once again, the pawner is entitled to be compensated with reference to the valuation at the point of pawning. According to section 65(1)(b), if this valuation is lower than the loan and profit secured by the pledge, the loan and profit are extinguished. But, the amount actually realised by the pawnbroker in selling

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the pledge may be higher than the valuation. There may be a surplus. Does this surplus go into the pawnbroker's pocket? If so, this again rewards pawnbrokers who deliberately give low valuations and then wrongfully realise the security.

[Deputy Speaker (Mr Seah Kian Peng) in the Chair]

To say that the pawnbroker has no property to pledge is not an answer, as he may have onward sold it to third parties. Neither does a pawnbroker, who wrongfully realises a pledge, commit an offence. It appears that the existing offence under section 33(g) of the existing Act has been removed in the Bill. What is the rationale behind removing this offence? I hope the Minister will clarify this issue as well.

Fourth, a point on section 67 which seeks to protect the rightful owner of the goods that have been wrongfully pawned. Under section 67(4)(b), in the absence of a Court order, a pawnbroker may choose whether or not to deal with the pledge. This is so even when there is a dispute pending between different persons who are claiming to be the owner of the goods. It is questionable if giving pawnbrokers this discretion truly protects the rightful owner.

A pawnbroker that refuses to deal with the pledge cannot charge interest on the loan in section 67(6). Consequently, rather than continuing to store the goods, a pawnbroker will likely allow its redemption or sell it off. Perhaps, the purpose of this section would be better achieved if the pawnbroker is prevented from dealing with the pledge for a fixed period upon receiving notice. This would give the rightful owner sufficient time to obtain a Court order. This protection is especially important where there is sentimental value attached to the wrongfully pawned goods, as in the case of a family heirloom. In such cases, monetary compensation would not suffice.

Fifth, some points of clarification on section 66. Subsection (4) is unclear as to what the pawnbroker must do after receiving an application from a person who claims to be entitled to redeem a pledge but does not have a pawn ticket. What "reasonable inquiries" are pawnbrokers expected to carry out? Would cross-referencing the applicant's details with its own records suffice? Additionally, section 66(7), which is similar to section 67(5), is unclear. I would like to clarify in what instance the pawnbroker will receive immunity when he omits to do something. It is a very strange way of drafting the Bill, in my view.

My final point is a practical one. Part 5 of the Bill introduces a new obligation for pawnbrokers: to develop and implement measures to prevent money laundering and

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terrorism financing. This is a timely move, given the growth of the pawnbroking industry. My concern is that the Bill's requirements, which are understandably complex and numerous, may be challenging for smaller pawnbroking businesses to implement.

For example, under section 74(2)(a)(i-ii), a pawnbroker must "take appropriate steps to identify, assess and understand the money laundering and terrorism financing risks" in relation to its pawners and the jurisdictions which its pawners are from or in. Pawnbrokers may not know what steps are needed to be taken or where to begin. In fact, these requirements are even difficult for banks or lawyers and other professionals who are expected to have money laundering regulations or systems in place. As such, I would like to ask whether the Ministry will assist pawnbrokers to understand what they need to do and help them implement such systems.

Mr Deputy Speaker, I thank Members for their support of the Bill and would like to address the comments and queries that they have raised.

Mr Hri Kumar, Mr Yee Jenn Jong and Mrs Lina Chiam had talked about the increase in the number of pawnbroking loans, as well as the number of pawnbrokers. The increase in the value of the loans disbursed by the pawnbroking industry depends on two things: First, the demand for credit; and second, the price of gold, the reason being that most pledges are actually gold items and the price of gold has increased significantly over the past five years. Therefore, we think that there is a strong correlation between the increase in the price of gold and the increase in the value of pawnbroking loans.

With the corresponding increase in the total value of the loans, there have been new entrants to the industry and an increase in the number of pawnshops run by chain operators who may be benefiting from economies of scale. The industry, as a whole though, has been law-abiding and there are few complaints about pawnbrokers.

We have, nevertheless, retained key provisions to protect consumers which are, as I mentioned earlier, that the interest rate continues to be capped at 1.5% per month and that any breach of this cap is an offence and the minimum redemption period of pledges is set at six months. MinLaw will continue to monitor the industry closely.

I move on now to the next point which was raised by Members and, that is, the removal of the auction system. This was raised by Assoc Prof Fatimah Lateef, Mrs Lina Chiam and Mr

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Hri Kumar. As mentioned in my speech earlier, actually, 95% of pawnbroking loans are redeemed by the pawners. We are really talking about the remaining 5%. And of the 5% that are not redeemed, 90% are uncontested and, as I mentioned earlier, therefore, yield no surplus to the pawners. We are actually talking about 10% of the 5%. The benefits of the auction system are enjoyed only by a very small number of pawners who might receive a surplus from the auctions.

On the other hand, the high costs of running regular auctions are borne by all the pawners. The pawnbroking industry is competitive and pawners are able to easily shop around for the best deal. So, there is a strong incentive for pawnbrokers to pass on cost savings to pawners and the new system will also require pawnbrokers to send pawners a notice of forfeiture. The notice will provide a valuation of the pledge as at the time of this issuance and the fresh indicative valuation will enable the pawner to make an informed decision about whether or not to redeem the pledge.

Assoc Prof Fatimah Lateef also inquired about the valuations provided by the pawnbrokers and asked us to consider the use of better descriptors or photographs as valuation details may not adequately identify the items. Before the item is pawned, the pawner will furnish the pledge to the pawnbroker to obtain the valuation. After the item is pawned, the pawnbroker will be required to issue a pawn ticket that contains information, such as a fair description of the pledge, including any manufacturer's serial number or other identifiable mark. This is, therefore, not necessary.

There were also other queries on valuations, such as whether wide variations in the valuations obtained would be acceptable, whether pawnbrokers might be incentivised to give unfairly low valuations and whether someone may claim against the pawnbroker if the pawnbroker did not act in good faith or take reasonable care in providing the valuation.

Strong competition in the pawnbroking industry will act as an effective check against pawnbrokers providing depressed valuations, since pawners will be able to shop around for the most favourable deal. With redemption rates at over 95%, there is little incentive for a pawnbroker to offer a depressed valuation at the time of taking the goods in pawn. A depressed valuation will mean a smaller loan can be extended. A depressed valuation provides a strong incentive for the pawner to sell the pawn ticket to another pawnbroker who will then redeem the pledge. Pawnbrokers who consistently offer depressed valuations are also likely to suffer reputational damage and may very well go out of business in a competitive industry.

Further, as Mr Hri Kumar noted, the pawnbrokers may be liable for any loss or damage suffered by the pawner or third party as a result of relying on the valuation provided by the pawnbroker if he did not act in good faith or take reasonable care in providing the valuation.

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Pawnbrokers will, therefore, have strong incentives to ensure that the valuation reflects the market value of the pledge. If the valuation is challenged, the Court will ascertain whether the pawnbroker had acted in good faith or had taken reasonable care in giving the valuation. The Court will examine all the relevant factors, such as the manner in which the pawnbroker had conducted the valuation and the level of skill or expertise involved. In this regard, it is no different from any other type of dispute where the value of an item is disputed and the Court has to take into account all relevant factors to see whether the valuation given was a fair and proper one.

Mr Hri Kumar also asked about the rationale for pegging the compensation to the valuation provided by the pawnbroker at the point of pawning. Pawnbrokers have strong incentives to ensure that this valuation reflects the market value of the pledge. This valuation also reflects the value that both parties had agreed on when entering into the transaction. Pegging the compensation to the value of the pledge at the time of redemption could also result in lower compensation for the pawner since the value of the pledge may have decreased.

Mr Hri Kumar asked, where the pawnbroker has wrongfully realised the pledge, whether the surplus goes to the pawnbroker and what the rationale was for removing the offence of dealing with any pledge in any manner that is not authorised by the Pawnbrokers Act. Where there is a surplus arising from the pawnbroker's wrongful realisation of the pledge, the pawner may file a claim against the pawnbroker to recover the surplus. Where such wrongful realisation of the pledge involves criminal misconduct, the persons involved may be effectively dealt with under the Penal Code or other relevant criminal statutes.

There were also a number of questions about the protection of rightful owners of goods wrongfully pawned. Mr Kumar asked whether the pawnbroker should be given the discretion to deal with the pledge after receiving a notice from a person who claims to be the rightful owner of goods that were wrongfully pawned. Clause 67(4)(b) of the Bill provides the pawnbroker with the option to deal with the pledge as he deems fit in such circumstances, if there is no Court order relating to the pledge. Where the pawnbroker proceeds to deliver the pledge to another party who is not the rightful owner, the pawnbroker may be liable for the tort of conversion under the common law. However, the clause also enables the pawnbroker to refuse to deal with the pledge for a period of three months after receiving the notice without being liable for any loss or damage caused. As Mr Kumar observes, this period of three months will give the rightful owner sufficient time to obtain a Court order relating to the pledge.

With regard to the replacement of pawn tickets, Mr Kumar had asked what "reasonable inquiries" the pawnbrokers are expected to carry out. The example Mr Kumar provided of cross-referencing the applicant's details against the pawnbroker's records is one way in

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which the pawnbroker may satisfy the test of making "reasonable inquiries". Where the applicant is not the pawner, the applicant may be asked to provide receipts as evidence of the purchase of the pledge. In this regard, it also should be noted that any applicant who makes a false claim is committing an offence under the Penal Code. In addition, I confirm that clauses 66(7) and 67(5) will only protect the pawnbroker from any loss or damage where it has done or omitted to do anything in accordance with their respective clauses.

Assoc Prof Fatimah Lateef asked about the licensing conditions for pawnbrokers, what the rationale was for not permitting a licensee to carry on the business of pawnbroking at any place other than the licensed place of business and whether a pawnbroker can meet or perform transactions with their clients outside their business premises. As pawnbroking transactions involve cash and valuable items, pawnbrokers are not allowed to conduct their business outside their licensed place of business for security reasons. You can imagine what would happen if a big diamond ring was displayed in the middle of a coffee shop and somebody is claiming that this cost $200,000. It is not a very good idea. In deciding whether or not to grant a licence, the Registrar considers whether the pawnbroker has put in place adequate security measures at his place of business, such as by installing CCTVs and security alarm systems.

Assoc Prof Fatimah Lateef asked whether pawnbrokers could be briefed about the new licensing conditions. The Registry of Pawnbrokers did, in fact, conduct a briefing on the Bill to the industry in November 2014, including on the new licensing requirements. Individuals with further queries may contact the Registry for assistance.

On money laundering and countering the financing of terrorism, in response to Assoc Prof Fatimah Lateef and Mr Hri Kumar, I would say these measures to prevent money laundering and terrorism financing are similar to those imposed in other financial sectors in Singapore, such as the banking sector, and the Ministry will work together with other relevant Government agencies to see how best to provide guidance to the industry.

Assoc Prof Lateef asked how many Islamic pawnbroking businesses there are in Singapore currently and whether they will be briefed. There are currently no licensed Islamic pawnbrokers in Singapore. The Registry of Pawnbrokers has not received any application to set up an Islamic pawnbroking business. And if there were to be any, Islamic pawnbrokers would be subject to the same regulations as other pawnbrokers in Singapore.

Mr Yee Jenn Jong had inquired about the various reasons for people taking up pawnbroking loans and also referred to cost of living and other expenses. In response, I would make a number of points. Pawnbroking loans are secured loans. The pawner needs to furnish items of personal property as collateral in exchange for a loan from the pawnbroker. So, in this regard, the amount of loan the pawner can take up is limited by the value of his

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collateral and, given the nature of pawnbroking loans, it is unlikely that the increase in the number of pawnshops would result in people over-extending themselves in credit. This is in response to his comment about the number of pawnshops there are.

The Registry of Pawnbrokers does not impose a cap on the number of pawnshops at any locality. People pawn items for various reasons and not necessarily for the purpose of gambling. Ultimately, individuals have to take personal responsibility for their finances. They should not gamble or borrow beyond their means.

In response specifically to the point that Mr Yee raised about cost of living, I think that what we should do is look at two groups of people: those who really cannot afford and whose income does not allow them to meet their expenses; and those whose income does allow them to meet their expenses but, for various reasons, they over-extend themselves. For those who have over-extended themselves, then, of course, it should be important that they should review how they used their finances and spend within their means.

But for those who are genuinely in need, this Government has always been ready to assist and the Government does, in fact, provide assistance. There are subsidies for education, healthcare, housing and childcare. There are GST vouchers which include cash, rebates to offset utility bills and a top-up to the CPF Medisave account. There are service and conservancy charges rebates. There are programmes and schemes for persons with disabilities. There is a Community Health Assist Scheme. There is the MOE bursary and financial assistance scheme. There are the CDC, CCC bursary, CPF housing grants, Workfare Income Supplement, ComCare assistance, Medifund and Public Assistance. So, for those, it would not be necessary for them to take their items to pawn. They should actually tap on these Government assistance schemes which are put in place specifically to assist those of low income and who are in need of help.

I thank the Senior Minister of State for all the answers. I would like to ask the Senior Minister of State about online pawnshop broking. Is it possible that Singapore can establish one?

Well, I think that one of the things we would have to do is to look at this in the context of the comments which the Members have raised. I think three Members – Mrs Chiam, Mr Yee and Mr Kumar – have stood up to express concern about the surge in the number of pawnbroking loans. And as I have explained, that is really related to the demand as well as the price of gold, but I think the underlying concern was that it is actually whether or not people might over-extend themselves in credit. So, even as the pawnbroking industry stands as it is today, I have had queries from three Members on whether that is something we should be concerned about. So, we think that the state of the industry, as it is today, can be addressed by this Bill and we would be very cautious before we would want to go with any online pawnbroking.

The short answer is, at the moment, it is not under consideration. It is something we would have to review and think about very carefully because we have to keep a balance between ensuring that there is enough credit available for those in need and, at the same time, not making it so easy that people over-extend themselves.

I thank the Senior Minister of State for her responses. Can I clarify something she said? She said that the loan extended will not exceed the valuation and I am not sure that there is a provision in the Act for that. The reason why I am concerned about low market valuations or artificially low valuations is simply this – if I could just illustrate with an example. If the pledge is worth $120 and the pawnbroker extends a loan of $100, he may be incentivised to provide a valuation of $80. So, when a pawner comes to redeem, he has to redeem $100 loan plus a profit. But if the pawner has to sell the collateral, he gets $120 because that is what it is worth. But if he loses the item or destroys the item or misplaces or does something wrongful with it, he only compensates the pawner $80. That is my concern about artificially low valuations – where, if the valuation is low enough, it provides the incentive for the pawnbroker to actually not do his job properly.

Insofar as market forces are concerned, I do not think that is going to be a right answer because, where the pawner is concerned, he is only looking at the amount of loan he gets and not so much the valuation which the pawnbroker gives him.

I think it is not possible to micro manage each transaction. So if you look at it from a broad basis, generally speaking, he would have known the pawnbroker would not have an incentive to depress the loan amount too much because it is possible for the pawner to go to another pawnbroker. If it is something that falls within a reasonable range, the pawner may well be happy to live with it. When you have an item, you would not necessarily go to the first pawnbroker – it is open to you to go to other pawnbrokers and see what is the best deal that you can get and our assumption is that people will actually work on this premise. We will see how the system goes, but if it turns out that there are abuses of the nature that Mr Kumar describes, then it may be necessary at a later point to intervene. At the moment, based on what we see, we think that this would be a workable system, but we will monitor and review.

Mr Deputy Speaker, I would like to thank the Senior Minister of State for a very detailed reply, especially on how Singaporeans can cope with the cost of living.

I noted that in the previous replies by the Ministry on this topic, they said that they did not track the reasons for non-redemption. There were also various reports, some of which I have cited, that quoted industry players saying how pawners were using their valuables to get cash for casinos and gambling, as well as to cover cost of living. I would like to ask the Senior Minister of State if the Ministry would like to more conclusively reply to all these comments by having a more detailed study about the reasons behind all these non-redemptions and about the profile of the pawnbroking industry.

It is a little difficult to track this kind of information because when a person goes to pawn an item – if he pawns it – and then you do not know at that point of time whether or not he is going to redeem it. So, you will only know when somebody has not redeemed it when he has not redeemed it. And then it would be a question of asking the pawnbrokers for the details and, even then, you will have to go and track down the person and say, "Why did you not redeem this piece of jewellery?" "What is the reason for not doing so?" You can see the kind of logistical difficulty that you would have in doing that. That is one of the reasons why we have not been able to track this.

We will take note of Mr Yee's request but, at the present time, we are really talking about 5% which goes unredeemed and the reasons that were given are largely anecdotal. We will look at it and keep Mr Yee's request under consideration but, as I have said, logistically, it is very difficult to pinpoint with mathematical accuracy what are the exact

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reasons people do not redeem.