1390 pawnshops granted market access under new rules

The new procedure of allowing pawnshops to enter the financial market is effective from 11 January. The Bank of Russia has already maintained a register of pawnshops but it was based on the data from the Unified State Register of Legal Entities (EGRUL). Now, information about pawnshops is included in the register only after the Bank of Russia's verification whether the legal entity, its officials and owners comply with legal requirements.

In order to continue their operations without restrictions, pawnshops had to pass a new access procedure by 10 April and submit the corresponding documents to the Bank of Russia. From 10 January through 10 April, documents were submitted by 2123 applicants (941 pawnshops, or 31% of their total number according to the register, failed to do so). According to the law, the operations of pawnshops not included in the register by 10 April under the new rules will be restricted: they will not be able to conclude new agreements and extend the deadlines for the fulfilment of obligations under previously concluded consumer loan agreements, however obligations under such agreements must be fulfilled.

The operating pawnshops may still submit to the Bank of Russia documents to confirm their status and to lift the above restrictions through 9 July 2021. However, if by that time information about an organisation has not been included in the register under the new rules, the company will lose its status of a pawnshop pursuant to a Bank of Russia decision based on the law.

The new pawnshop registration procedure is aimed at protecting the interests of individuals and preventing malpractices in the consumer lending market. This will make it easier for consumers to distinguish between financial institutions supervised by the Bank of Russia and fraudsters.

The list of pawnshops registered under the new rules and those whose operations are restricted is published on the Bank of Russia website.