Regulatory Alerts2021-01-01
Instructions No. 4 of 2021 Regarding the Granting of Loans and Financing to Related Parties
The Palestine Monetary Authority issued Instructions No. 4 of 2021 to regulate the granting of loans, financing, and guarantees to related parties at licensed specialized lending institutions. The directive mandates prior written regulatory and board approval for transactions involving senior management and board members, strictly caps the related-party loan portfolio at 5% of total equity, and prohibits related parties from participating in their own credit approvals. Furthermore, it requires automated classification systems, mandates full disclosure in periodic and financial reports, and enforces penalties for non-compliance under Decision No. 132 of 2011.
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