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2019-01-01

Circular No. 1 Cash Deposits

The Palestine Monetary Authority issued Circular No. 1/2019 mandating all Palestinian banks to strengthen supervisory controls and due diligence procedures in response to Israel's new cash usage reduction law. The directive requires financial institutions to implement automated AML/CTF reporting systems, verify customer identities and risk profiles, and conduct enhanced due diligence to document the sources of all cash deposits. Furthermore, banks must continuously monitor cash deposit volumes and establish internal procedures to reject deposits that negatively impact liquidity or pose potential financial risks.

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Palestine Monetary Authority

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Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Circular No. (1/2019)

To all banks operating in Palestine

Date: Wednesday, January 02, 2019

Subject: Cash Deposits

In light of the implementation of Israel's "Reduction of Cash Usage" law, and with the aim of mitigating potential risks, and in the interest of the Palestine Monetary Authority's commitment to financial stability in Palestine, the Authority emphasizes the necessity of undertaking the following:

  1. Strengthen supervisory procedures and controls and exercise due diligence, which shall include at a minimum:

    Develop anti-money laundering and counter-terrorist financing systems capable of generating automated reports and alerts at the level of individual customer financial transactions and the total of their cash deposits over a specified period, and link them to the proportionality with the customer's personal income and the nature of their business.

    Implement customer identification and verification procedures for both natural and legal persons.

    Classify customers according to their risk levels.

    Train and qualify bank staff on due diligence and enhanced due diligence.

  2. Exercise due diligence and enhanced due diligence to verify the sources of cash deposits made in customer accounts; which includes obtaining supporting documentation for the sources of such funds.

  3. Ensure continuous monitoring of the volume and sources of cash deposits, and establish necessary procedures to limit the acceptance of deposits that negatively impact the bank's cash holdings and/or involve potential risks.

Supervision and Inspection Department
Palestine Monetary Authority

Copy: To the esteemed Financial Monitoring Unit.

Note:
www.pma.ps
Ramallah & Al-Bireh Governorate - Palestine P.O. Box 452
info@pma.ps | Fax: +970 2 2415310 | Tel: +970 2 2415251
Gaza - Palestine P.O. Box 4026
Fax: +970 8 2844487 | Tel: +970 8 2825713

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