Circular No. 11/2022: Amendments to the Bounced Cheques System

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Palestine Monetary Authority PALESTINE MONETARY AUTHORITY

Circular No. (11/2022) To all banks operating in Palestine Date: Tuesday, May 10, 2022

Subject: Amendments to the Bounced Cheques System In continuation of the Palestine Monetary Authority's approach to developing its systems and operational procedures to enhance the operational risk management environment for banks, with the aim of reducing operational risks, strengthening the bounced cheques system, and limiting bounced cheques due to insufficient funds, the following amendments to the operational mechanism of the bounced cheques system have been decided:

First: Amendment to the Cheque Payment Period (12) Working Days: Reduction of the payment period for the cheque/cheques on the bounced cheques system from (12) working days to (5) working days. This benefit is available only to customers classified as grade (C) on the bounced cheques system, whereby their classification will automatically change to grade (E) upon payment within the legal time period.

Second: Incentive Measures for Customers Classified as (B) Granting customers classified as grade (B) an additional benefit on the bounced cheques system, whereby their classification will be upgraded to grade (A) instead of (E) if they clear all bounced cheques on their accounts within the cheque payment period from the date of bouncing.

Third: Amendments to Customer Classifications: In order to analyze customer classifications and determine the volume of issued and bounced cheques according to their legal status, the legal statuses for individuals and companies have been further expanded. Accordingly, compliance with declaring customer classifications under the new amendments introduced in accordance with Annex No. (1) is required.

Accordingly, all banks are requested to take the necessary measures, including notifying customers of the aforementioned amendments, noting that they will be implemented effective June 12, 2022.

[Signature] Financial Stability Group Palestine Monetary Authority

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

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Annex No. (1) Customer Classifications

1000	Companies Companies registered with the Companies Registrar
1001	Tourist Companies
1002	Educational Companies and Institutions registered with the Companies Registrar
1003	Commercial Companies (General Trade, Import and Export)
1004	Telecommunications and Information Technology Companies
1005	Real Estate Companies
1006	Financial Companies and Banks
1007	Insurance Companies
1008	Contracting and General Works Companies
1009	Public Service Companies
1010	Pharmaceutical and Medical Supplies Companies
1011	Industrial Companies (Food, Beverages, Cleaning Materials)
2000	Government Institutions
3000	Public Sector Individuals (Government Employees)
3001	• Police Force
3002	• Preventive Security
3003	• Civil Defense
3004	• Intelligence Agency
3005	• National Security
3006	• Internal Security
3007	• Government Health Sector Employees
3008	• Government Education Sector Employees
4000	Private Sector Individuals (Private Sector Employees)
4001	Tourist Company Employees
4002	Private Educational Companies and Institution Employees
4003	Commercial Company Employees
4004	Telecommunications Company Employees
4005	Real Estate Company Employees
4006	Financial Company and Bank Employees
4007	Insurance Company Employees
4008	Contracting and Works Company Employees

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4009	Service Company Employees
4010	Pharmaceutical Company Employees
4011	Industrial Company Employees (Food, Beverages, Cleaning Materials)
5000	Associations and Clubs
5001	Associations in all their forms
5002	Religious Bodies
5003	International Bodies
5004	Embassies and Consulates
5005	Trade Unions and Labor Bodies
6000	Skilled Tradespeople, Freelancers, and Merchants (Representing private sector individuals including artisans, professionals, merchants, engineers, doctors, lawyers, etc.)
6001	Shop Owners
6002	Bakery Owners
6003	Professionals and Artisans
6004	Doctors
6005	Engineers
6006	Restaurant and Café Owners
6007	Restaurant and Café Workers
6008	Agriculture, Forestry, and Fishing Workers
6009	Arts, Entertainment, and Recreation Sector Workers
7000	Students, Housewives, Trainees, etc.
	(Categories with no fixed or verifiable variable income)
8000	Unregistered Institutions with the Companies Registrar
8001	Schools and Educational Institutions unregistered with the Companies Registrar
8002	Cafés and Restaurants
8003	Engineering and Law Offices
8004	Commercial Shops unregistered with the Companies Registrar
8005	Medical Centers unregistered with the Companies Registrar
8009	Pharmacies

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