OJK Finally Regulates Pawnbroker Businesses

In the wake of officially gaining the authority to regulate and supervise non-bank financial institutions on 31 December 2012[1], the Financial Services Authority (“OJK”) has finally issued its first regulation on pawning businesses, specifically OJK Regulation No. 31/POJK.05/2016 on Pawnbroker Businesses (“2016 Regulation”).
 
The 2016 Regulation introduces a holistic arrangement for pawnbroker businesses which have previously never been supervised or otherwise regulated, despite having existed in the country since the Dutch colonial era. To this end, the 2016 Regulation sets out provisions on the establishment of sharia or conventional pawnbroker businesses, and covers:[2]