Regulatory Alerts2023-01-01
Instructions No. 18 Regarding the Distribution of Dividends and Bonuses and Establishment of Provisions for 2023
The Palestine Monetary Authority issued Instructions No. 18 of 2023 to mandate precautionary measures for licensed banks amid economic uncertainty following the Gaza Strip conflict. The directive restricts cash dividend distributions to shareholders and foreign bank head offices for 2023, permits bonus share distributions with regulatory approval, and requires conservative expected credit loss calculations, including a 60% minimum weighting for severe scenarios and 100% provisioning for Gaza-related exposures, corporate debts, and finance leases. Furthermore, it mandates that senior management bonuses reflect long-term institutional performance rather than solely current-year results, with full financial impact reports due by January 31, 2024.