How the Moneylending industry works in Singapore?
As rules are necessary to govern any industry, same goes for moneylending industry. There are certain guidelines and rules laid by the government of that country for the moneylending procedure. If one firm has to enter this industry in a country like Singapore, they most certainly have to follow the Singapore moneylending rules. The guidelines have been stated by the government of Singapore. In this article, we will be covering the standard rules, regulations and guidelines set up the government of Singapore for the moneylending industry. Any company that forbids to follow the rules will have to deal with the consequences. These rules have been implement hard and fast by the government of Singapore. A Moneylenders Act has been established by the government of Singapore for stating the guidelines. If you wish read more detailed version of the act, you can read it online at SSO (Singapore Statuses Online).
The Moneylender Act
In the Moneylender Act, certain terms have been defined for better understanding of the concept. Bank can be stated as a financial institution that has been certified as bank by the Banking Act. A body corporate can be termed as liability partnership (limited). Business name is defined as the name which is going to be used by the moneylender, the name which be licensed for the business of moneylending. Corporation can be defined as an institution which has been categorised as corporation as per the Companies Act. Business trust is the quality which can be inherited under the certification guidelines stated by the Business Trust Act.
As per the Moneylender Act, Moneylender can be defined as an agent or a person who carries himself / herself in the business of moneylending. They do not include any excluded moneylender. Excluded moneylender can be termed as a person who lends money to her/his employees as a perk of being employed in his / her company. Or excluded moneylender can be a person which gives out loan to corporation or investors under the Futures and Securities Act. Or excluded moneylender can be anyone who gives out money but doesn’t have any business specifically oriented to the field of moneylending. Giving out loan to people is not the primary business of the person, those people are called excluded moneylenders. There is another term in the moneylender act known as exempt moneylender. A person who has been exempted from holding a license under the Section 35 and Section 36 of the moneylender act is known as exempt moneylender.
How the moneylenders are licensed?
Any person can carry out the methods of moneylending if and only if they are licensed moneylenders, excluded moneylenders or exempted moneylenders. Otherwise, no one is allowed to lend money to anyone. The application which is submitted for seeking license is to be examined by the registrar. So, it is expected that the candidate will file the application as per the guidelines stated by the Registrar. And the application will be filed only if the non-refundable fee is paid by the candidate. The amount to be paid and how it is to be paid is stated in the guidelines laid out by the registrar. The validation of the candidate’s application solely depends upon the registrar.
The registrar will not be accepting the application if any misleading information has been submitted by the candidate. Manipulation of the original documents is frowned upon and not accepted in any manner. And it is expected that the candidate will not submit incomplete information. The application of the candidate will be rejected if they do not meet with the requirements of the class for which candidate is seeking license for. The application will not be accepted if the application does not match with the security guidelines stated by the account-general. If such situation arises, the registrar has the authority to ask the moneylending business to deposit a fee of $20,000. And when the application of the candidate has been accepted, then the license will become active within a period of 12 months i.e., a year. If license has been issued to a firm, then they have to make sure that every member of the firm is involved in the business of moneylending. All the members have to be active participants of the firm at all times.
Renewal of License
If a moneylending business is seeking the renewal of license, then they are supposed to apply for renewal within a month of expiration of the license. If they apply after more than a month of expiry date of the license, the registrar will probably refuse the request for renewal of the license. The request for renewal of licence might not be accepted by the registrar if the information given by the fir or business is misleading or incomplete or incorrect, the license does not meet the requirements of the class or the company is not following the security guidelines stated by the Account-General. Otherwise, the application will be renewed. And the application will be renewed easily and it will be valid for a period of 12 months.
If the application is not a resident of Singapore, there is possibility that your application might not be accepted. It is expected that at least one member on the board of moneylending business has to be ordinarily a resident of Singapore.
These are the basic guidelines for entering the moneylending business i.e., standard Singapore Moneylenders Rules. If these rules are not followed, the candidate will be exempted from following the business of moneylending. Singapore moneylenders rules are to be strictly followed by any moneylending business. They will not be provided a license if these guidelines are not followed. The moneylending businesses are certified or licensed by the law of ministry i.e., Minlaw. The government of Singapore ensures that these guidelines are strictly followed by the people owning a moneylending business in Singapore. These moneylending businesses provided all types of loans i.e., personal loans, educational loans, foreigner loans, business loans and payday loans.