Regulatory Alerts2024-01-01
Circular No. 67 on Expected Credit Losses
The Palestine Monetary Authority issued Circular No. 67 of 2024 to direct all operating banks to maintain compliance with Expected Credit Losses requirements under Circular No. 18 of 2023 for financial statements as at 30 June 2024. Banks must incorporate forward-looking macroeconomic indicators, prioritizing updates from the Palestine Central Bureau of Statistics, and provide justification when using alternative data sources for provision calculations. Furthermore, institutions are required to submit the finalized monthly financial forms within three days of the circular's issuance.
Palestine Monetary Authority PALESTINE MONETARY AUTHORITY
Circular No. (67/2024)
To all banks operating in Palestine
Date: Sunday, July 28, 2024
Subject: Expected Credit Losses
With reference to the above subject, and in light of the ongoing preparation of financial statements as at 30 June 2024 in accordance with international standards, particularly Standard (IFRS9), the Bank is requested to take the following measures:
A. Continue applying the requirements of Circular No. 18 of 2023 regarding Expected Credit Losses to the financial statements as at 30 June 2024. B. Take into account Principle 2 of the requirements of Circular No. (2018/2) regarding the impact of forward-looking information, including macroeconomic factors, on assessing credit risk and measuring the level of provisions. C. Adopt the macroeconomic indicators issued by the Palestine Central Bureau of Statistics when calculating Expected Credit Losses in accordance with their updates, and if indicators from other entities are adopted, provide our justification for the Bank's calculation results using those entities' indicators compared to the results using the Central Bureau of Statistics' indicators. D. Submit the financial statements as at 30 June 2024 using the approved monthly form, in compliance with the standards as outlined above, within a maximum of 3 days from this date.
Supervision Group Palestine Monetary Authority