In Tamil Nadu a shop that takes ornaments in pawn is a pawnbroker under the Tamil Nadu Pawnbrokers Act, 1943, and needs a pawnbroker’s licence for each shop from the Tahsildar. Lending without a pledge — on a pronote, a cheque or a signature — is covered by the Tamil Nadu Money-Lenders Act, 1957 and its own licence; a shop that does both holds both.
Which law covers you
- Tamil Nadu Pawnbrokers Act, 1943 and the Pawnbrokers Rules, 1943 — a licence for every shop that holds pledged goods (section 3).
- Tamil Nadu Money-Lenders Act, 1957 and the Money-Lenders Rules, 1959 — a licence for anyone whose main or side business is advancing and recovering loans (section 3).
- Tamil Nadu Prohibition of Charging Exorbitant Interest Act, 2003 — makes charging above the notified rate a criminal offence.
- Tamil Nadu Money Lending Entities (Prevention of Coercive Actions) Act, 2025 — the new registration for lenders other than pawnbrokers (below).
Neither of the 1943 and 1957 Acts exempts a holder of the other licence. Most gold-loan shops hold the pawnbroker’s licence; the ones that also give hand loans hold both.
Who issues the licence
The Tahsildar of your taluk (or the independent Deputy Tahsildar) issues both licences under the Revenue Department, and may consult the police inspector before granting a pawnbroker’s licence. Appeals go to the Revenue Divisional Officer or Sub-Collector — in Chennai, to the Collector’s personal assistant (general) — within 30 days.
Apply online on TN e-Sevai
Both licences are e-Sevai services of the Revenue Department: REV-401 “Licence under Pawn Broker Act” and REV-402 “Money Lender’s Licence”, for a new licence or a renewal.
- Open tnesevai.tn.gov.in (or any e-Sevai centre) and get a CAN — the Citizen Access Number — with a mobile OTP.
- Services → Revenue Department → REV-401 (or REV-402) → New or Renewal.
- Fill the applicant, residence, shop, contact, payment and property sections. Every extra shop must be listed, and each shop needs its own licence.
- Pay the licence fee by bank challan and enter the challan details — the portal accepts no other mode for the fee — then upload the documents, accept the declarations, submit and print the acknowledgement.
- Track the application under Check Status and download the digitally signed licence (Form B) when the Tahsildar approves. The e-Sevai centre charges about ₹60 for the service.
The paper route still exists: Form A to the Tahsildar with the treasury receipt.
Documents to keep ready
The Rules and the e-Sevai form ask for:
- Form A, with a passport photograph and three specimen signatures attested by the licensing authority
- A nominee — a person of equal or greater solvency and good character, with their written consent, who will carry on the business until every pledge is cleared if you cannot. The nominee’s residence and solvency proofs go with the application.
- The treasury or bank challan for the fee
- Proof of residence and of the shop (lease deed or patta/chitta), and a solvency certificate for the applicant
- A self-declaration, and the previous licence for a renewal
- For a firm, HUF or association: its particulars and partners (money-lender form)
Files are uploaded at 200 KB or less; the photograph at 50 KB.
Fees and validity
| Pawnbroker (1943 Act) | Money-lender (1957 Act) | |
|---|---|---|
| Fee | Fixed by notification, up to ₹500 (section 4), plus a security deposit “as prescribed” — the notified amounts are not published online; the challan amount comes from the Tahsildar’s office | ₹100 per application, grant or renewal, into the treasury; no deposit |
| Validity | One year, then renewable three years at a time for three times the fee; runs to 31 March | To the last day of the financial year; renewed year by year, valid until the renewal order arrives |
| Duplicate licence | ₹30 | ₹30 |
| Late renewal | No late fee in the Rules; renew before 31 March | No late fee in the Rules; renew before 31 March |
Interest you may charge
Money-lenders: the rate notified under section 7 is 9% a year simple on secured loans and 12% on unsecured loans (G.O. Ms. No. 406, Co-operation, 5 July 1979), and the Madras High Court was still applying those figures in 2025. A court will not decree interest above the principal (section 20-A).
Pawnbrokers: the rate is fixed by notification and may not exceed five percentage points above the RBI’s current bank lending rate (section 6, as amended in 1992); the pawn-ticket form still prints the older 12% a year. The current notified figure is not published online — ask the Tahsildar before printing a rate. Charging above the notified rate is an offence under the 2003 Act, punishable with up to three years and a ₹30,000 fine.
What the licence obliges you to do
- Name board over the door with the word “pawnbroker” (or “money-lender”) in Tamil, and the pawn-ticket particulars displayed (section 5).
- Pawn ticket in English and Tamil for every pledge, with the full principal paid without any deduction (section 7). No interest can be claimed for any period in which the ticket or a receipt was not given (section 21).
- The books: pledge book (Form E), cash book, sale book (Form G), receipts (Form H) and a pass-book (Form K), kept in Tamil or English for three years; a money-lender keeps the account book (Form C) and quotes the licence number on every receipt.
- Half-yearly returns to the Tahsildar (Form M, pawnbrokers) by 15 September and 15 April; money-lenders file Form H with the Inspector.
- Pledges stay at the licensed shop (section 10-A) and the premises are used for nothing else; no change of premises without an endorsement. Inspectors may examine the books and the pledges.
Unredeemed gold: the auction rules
A pledge can be redeemed for one year plus seven days of grace (section 11), or longer if the ticket says so, and stays redeemable until it is actually sold. Sale is only by public auction under Rule 12:
- Apply before the 15th of the month to the Collector (Chennai) or the RDO with lists of the pledges in triplicate; auctions are held in the first fortnight of February, May, August and November, by an approved auctioneer, in the presence of a revenue officer.
- Send the pawner a registered-post notice at least 45 days before the sale (the village officer affixes it if undelivered), and publish a newspaper notice twice.
- The upset price is at least 80% of the gold value plus 80% of the stone value, fixed by an approved appraiser; the catalogue prints the weights.
- Surplus to the pawner within 30 days; unclaimed after six months, it is deposited with the Government (section 12).
If pledged goods are lost to theft or fire the pawnbroker pays at least the principal, interest and a quarter of the principal on top (section 13). Our auction guide covers the notices and paper trail.
The 2025 registration for lenders
The Money Lending Entities (Prevention of Coercive Actions) Act, 2025 came into force on 19 November 2025. Any person or firm lending money other than a bank, NBFC or co-operative needs a Certificate of Registration from the District Collector: ₹10,000, valid three years, renewed at least 60 days before expiry for another ₹10,000, with a cash book, ledger and loan register, an annual statement by 30 September and records kept for eight years. Applications go through tnmoneylending.tn.gov.in. Existing lenders had 90 days from commencement. Pawnbroking under the 1943 Act is excluded by the Act itself; a shop that also gives unsecured loans should register, and the first police case under the Act was reported in February 2026. Lending without registration carries up to three years and a ₹1 lakh fine.
Pawnbroking without a licence
The 1943 Act’s fines are old and small — ₹50, ₹2,000 for a repeat, ₹50 a day if you carry on — but charging more than the ticket shows means three to six months in prison, absconding with pledges up to two years, and a court will not enforce an unlicensed money-lender’s loan. In practice the police inspector consulted at licensing is the same one who acts on a complaint, and an unlicensed shop has no answer when a pledge dispute reaches him.
How software fits in
GoldKhata prints the pledge bill in English and Tamil as section 7 requires, keeps the pledge book, cash book, sale book and receipts as you work, counts the one-year-and-seven-days redemption window and the 45-day notice, and carries your licence number on every document. Interest is counted at the rate you set — simple, as the notifications require here.
Sources
- Tamil Nadu Pawnbrokers Act, 1943 and Rules, 1943 (Commissionerate of Revenue Administration)
- Tamil Nadu Money-Lenders Act, 1957 and Rules, 1959, with the 1979 interest notification
- e-Sevai manual — REV-401 and REV-402
- Money Lending Entities (Prevention of Coercive Actions) Act, 2025 and the registration portal FAQ
Frequently asked questions
Do I need the money-lender licence as well as the pawnbroker licence?
If every loan is against pledged gold, the pawnbroker's licence is the one the 1943 Act requires. If you also lend on pronotes, cheques or signatures, the 1957 Act's licence applies too, and since November 2025 so does the registration with the District Collector.
How much does the pawnbroker licence cost?
The Act caps the fee at ₹500 per licence and adds a security deposit fixed by the Rules, but the notified amounts are not published online. The money-lender's licence is ₹100 per application. Take the challan figures from the Tahsildar's office.
How long is the licence valid?
Both run to 31 March. A pawnbroker's licence is granted for a year and then renewed three years at a time for three times the fee; a money-lender's licence is renewed every year and stays valid until the renewal order arrives.
What interest can I charge?
A money-lender may charge 9% a year simple on secured loans and 12% unsecured under the 1979 notification. For a pawnbroker the notified rate may not exceed the RBI bank lending rate plus five points — ask the Tahsildar for the current figure. Charging above the notified rate is a criminal offence under the 2003 Act.
When can I auction unredeemed gold?
One year and seven days after the pledge, at the quarterly public auctions in February, May, August and November, after a registered-post notice of at least 45 days and two newspaper notices, at an upset price of at least 80% of the gold and stone value.
Does the 2025 Money Lending Entities Act apply to a pawn shop?
Not to pawnbroking under the 1943 Act — the Act excludes it. It applies to any other lending, so a shop that also gives unsecured loans registers with the District Collector for ₹10,000, valid three years.