Regulatory Alerts2019-01-01
Circular No. 261 Bank Employees' Accounts
The Palestine Monetary Authority issued Circular No. 261/2019 mandating all Palestinian banks to implement strict monitoring and auditing procedures for employees' bank accounts to prevent misuse and safeguard the sector's integrity. The directive requires banks to verify the purpose of checkbook issuances, screen employees against returned cheque systems, and rigorously review transaction patterns against income levels to detect unusual or third-party-directed activities. Additionally, banks must reinforce internal controls, enforce disciplinary actions for compliance breaches, and report any violations to the Authority and relevant competent authorities.
Palestine Monetary Authority
PALESTINE MONETARY AUTHORITY
Circular No. (261/2019)
To all banks operating in Palestine
Date: Wednesday, November 06, 2019
Subject: Bank Employees' Accounts
In order to safeguard the integrity and reputation of the banking sector, promote a culture of compliance and enhance integrity among bank employees, and to mitigate the risks of misuse of bank employees' accounts for the benefit of third parties and/or contrary to their intended nature and purpose, we emphasize the necessity for banks to monitor employees' unusual activities and take the necessary measures and procedures as follows:
First: Issuance of Checkbooks.
- Verify the purpose and intent behind employees' requests to issue checkbooks, avoid over-issuing check papers and books, and monitor check inventory before issuing any new books.
- Inquire about the employee via the Returned Cheques System before approving the issuance request and before delivery.
- Monitor the flow and value of issued and collected cheques in employees' accounts and exercise due diligence regarding them, including verifying their alignment with the issuance purpose, income level, and nature of those accounts.
Second: Auditing and Monitoring of Employees' Conduct and Accounts.
- Monitor and audit employees' accounts and the financial operations and transactions conducted therein, examining the alignment of those operations with the nature of the accounts and monthly income, while verifying any unusual operations or transactions executed for the benefit of third parties.
- Assess employees' conduct and performance, reinforce standards of professional ethics, compliance, and integrity, and strengthen the implementation of administrative and disciplinary measures against violators, including reporting to the Palestine Monetary Authority and competent authorities any breaches and violations of applicable laws, regulations, directives, and internal policies and procedures.
3. Monitor financial operations and transactions conducted on employees' accounts at other banks, including exercising due diligence and ensuring the integrity of those operations.
4. Strengthen internal controls over employees' performance, conduct, and financial transactions, and take necessary measures to mitigate risks of fraud, embezzlement, credit defaults, suspicious activities, and other related risks.
Supervision and Evaluation Department
Palestine Monetary Authority
Ramallah & Al-Bireh Governorate - Palestine P.O. Box 452
Ramallah & Al-Bireh Governorate - Palestine P.O. Box 452
info@pma.ps | Fax: +970 2 2415310 | Tel: +970 2 2415251 | Phone: +970 2 2415251
Gaza - Palestine P.O. Box 4026
Gaza - Palestine P.O. Box 4026
www.pma.ps