Regulatory Alerts2015-01-01
Circular No. 100 on Increasing Paid Capital
The Palestine Monetary Authority issued Circular No. 100 mandating all Palestinian banks to increase their minimum paid or allocated capital to $75 million or its equivalent. Banks must submit a capital increase plan within three months, detailing implementation steps to reach the $75 million threshold by July 15, 2018, while ensuring no single entity or related group holds more than 25% of shares or voting rights. Institutions failing to comply must deposit a non-withdrawable capital reserve equal to 20% of the minimum allocated capital, payable in installments on July 18 of each year from 2016 to 2018 based on $58, $66, and $75 million milestones.
Palestine Monetary Authority
PALESTINE MONETARY AUTHORITY
Circular No. (155/2015)
To all banks operating in Palestine
Date: Wednesday, July 15, 2015
Subject: Increasing Paid / Allocated Capital
Pursuant to the Board of Directors' decision of the Palestine Monetary Authority regarding raising the minimum paid / allocated capital to balance banking operations in Palestine to ($75) million or its equivalent in currencies circulating in Palestine, and Instructions No. (2015/06) dated 15/07/2015 issued specifically, all banks are required to:
Comply with the following:
- Submit a plan to increase the paid / allocated capital to $75 million within three months from the date hereof.
- The plan must include the steps for capital increase and the necessary implementation timeline; such that the paid capital increase to $75 million is completed within three years ending on 15/07/2018.
- Local banks must ensure that the capital increase plan addresses ownership concentration, such that the ownership percentage in no case exceeds 25% of the bank's shares or voting power for any person or group of persons acting together directly or indirectly, sharing a common interest, or related by kinship up to the second degree.
- Banks refusing to comply with depositing a non-withdrawable capital deposit with the Palestine Monetary Authority at a rate of 20% of the minimum allocated capital specified by the Authority, must complete the deposit over a three-year period regardless of the paid capital amount or capital increase plan. The deposit rate shall be calculated on amounts of ($58), ($66), and ($75) million respectively, and the due amounts shall be transferred on July 18 of each year starting from 18/07/2016.
Supervision and Inspection Department
Palestine Monetary Authority
Ramallah - Palestine P.O. Box 452 | Tel: +970 2 2415250 | Fax: +970 2 2409922 | +970 2 2409922: Fax | +970 2 2415250: Phone | 452 Ramallah - Palestine P.O. Box
Gaza - Palestine P.O. Box 4026 | Tel: +970 8 2825292 | Fax: +970 8 2844487 | +970 8 2844487: Fax | +970 8 2825292: Phone | 4026 Gaza - Palestine P.O. Box
Email: info@pma.ps | info@pma.ps: Email