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2023-01-01

PMA Instructions No. 14 of 2023 on Salary Advance Loans for Public Sector Employees

The Palestine Monetary Authority issued Instructions No. 14 of 2023 requiring all licensed banks in Palestine to grant temporary salary advance loans to public sector employees at a maximum 50% deduction rate, with the Ministry of Finance covering the interest or return. The regulations mandate that loans be disbursed based on official financial statements, capped at a 3% reducing daily interest rate, and repaid upon salary transfer. These provisions apply to all licensed banking institutions as of the instruction's issuance date on November 27, 2023.

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Palestine Monetary Authority PALESTINE MONETARY AUTHORITY

Instructions No. (14) of 2023 Regarding the Granting of Salary Advance Loans to Public Sector Employees

Based on the provisions of Law Decree No. (9) of 2010 concerning Banks, particularly Articles (40 and 72) thereof, and in accordance with the powers delegated to us, and in pursuit of the public interest, we have issued the following instructions:

Article (1) Objective and Scope of Application

  1. These instructions aim to regulate the procedures for granting temporary loans to public sector employees.
  2. The provisions of these instructions apply to all banks licensed by the Palestine Monetary Authority to conduct banking business in Palestine.

Article (2) Public Sector Employee Salary Advance Loans

The bank shall comply with the following:

  1. Disburse a loan to public sector employees at a rate of 50% of the salary, according to the statements of the Ministry of Finance and the Pensions Authority.
  2. The minimum loan for a non-borrowing employee, or the net salary received by a borrowing employee in the previous month, shall not be less than the applicable threshold.
  3. The loan shall be used to settle any loans the employee obtained after 2023/11/1, provided that deductions do not exceed 50% of the loan.
  4. The maximum allowable interest or return to be charged shall be 3% reducing, calculated on a daily basis.
  5. The Ministry of Finance shall bear the interest or return on the temporary loan for public sector employees.
  6. The loan shall be repaid upon salary transfer.

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Palestine Monetary Authority PALESTINE MONETARY AUTHORITY

Article (3) Entry into Force

All competent authorities shall, each within its respective jurisdiction, implement the provisions of these instructions, which shall apply as of their date of issuance.

Issued in Ramallah, on: 2023/11/27

Dr. Firas Melhem Governor [Signature]

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www.pma.ps Ramallah & Al-Bireh Governorate - Palestine P.O. Box 452 Postal Code: P6160675 | Phone: +970 2 2415251 | Fax: +970 2 2415310 | info@pma.ps

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