Regulatory Alerts2011-01-01
Circular No. 29: Development of the Borrower Classification System
The Palestine Monetary Authority issued Circular No. 29 to mandate updates to the credit classification system for all banks operating in Palestine, effective March 1, 2011. The revised framework introduces nine key modifications, including a 30-day grace period for payment delays, direct risk linkage between borrowers and guarantors, adjusted risk weights for credit card utilization, and detailed 24-month disclosure of payment delays and guarantee types. Additionally, the circular establishes a five-tier risk grading table with specific default probability ranges and assigns color-coded score thresholds for individuals and companies to standardize credit risk assessment across the banking sector.
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