Regulatory Alerts2022-01-01
Lending-2022- Circular No. 158: Updated Version of the Borrowers' Credit Classification System
The Palestine Monetary Authority issued Circular No. 158/2022 mandating all lending institutions in Palestine to implement Version V of the Borrowers' Credit Classification System effective July 31, 2022. The updated framework introduces gender and age-based risk adjustments for individuals, removes credit inquiry variables to promote competitive borrowing, and revises SME risk weighting while exempting them from weak collateral penalties. For corporate borrowers, the revision adds variables tracking post-default settlement timelines, adjusts current account facility risks, and suspends classification for guarantor-only entities, with all changes requiring immediate internal dissemination to credit information system users.
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