Regulatory Alerts2013-01-01
Instructions No. 5 of 2013 Regarding the Regulation of Islamic Banks' Operations and Sharia Supervision
The Palestine Monetary Authority issued Instructions No. 5 of 2013 to regulate the operations, financing, and investment activities of Islamic banks operating in Palestine, mandating strict Sharia compliance and supervisory oversight. The directive establishes comprehensive controls on financing structures, equity and real estate investments, dedicated investment portfolios, and profit distribution and loss-bearing policies between equity holders and investment account holders. It further mandates the creation of specific reserves, including a legal reserve, a risk reserve, and a cyclical fluctuations reserve, while defining the roles and approval requirements for Sharia Supervisory Boards and resident auditors.
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