Regulatory Alerts2023-01-01
Instructions No. (6) of 2023 Regarding the Opening of a Temporary Overdraft Current Account for Public Sector Employee Borrowers
The Palestine Monetary Authority issued Instructions No. (6) of 2023 to regulate the opening of temporary overdraft current accounts for public sector employees facing irregular salary disbursements. The directives mandate licensed banks (excluding Islamic banks) to open these accounts to service overdue loan installments, cap annual declining interest at 3%, prohibit commissions, and require full settlement upon salary receipt, while allowing account closure upon employee request or bilateral repayment arrangements. Furthermore, the instructions require banks to classify the associated credit according to International Standard No. (9) risk methodologies and enforce compliance through penalties stipulated in the 2010 Banks Legislative Decree.