Regulatory Alerts2014-01-01
Instructions No. 6 of 2014 Concerning Credit Granted to Related Parties
The Palestine Monetary Authority issued Instructions No. 6 of 2014 to strictly regulate credit extended to related parties, mandating adherence to approved credit policies, transparent terms, and non-preferential treatment aligned with standard customer conditions. The directive establishes precise exposure ceilings, limiting related-party credit to 10%–25% of the bank's capital base depending on the party's position, while requiring prior regulatory approval for facilities exceeding USD 50,000 or deviating from approved employee lending programs. Additionally, it prohibits the write-off or forgiveness of related-party debts without dual board and regulator consent, mandates automated classification and comprehensive financial disclosures, and enforces statutory penalties for non-compliance.