Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Circular No. (2014/59)
To all lending institutions operating in Palestine
Date: Tuesday, April 29, 2014

Subject: Development of the Credit Information System - Clarification Circular

In reference to PMA Circulars No. (2014/12) dated 20/01/2014 and No. (2014/53) dated 14/4/2014, concerning the development of the Credit Information System (Version III), and following the field visits conducted to banks and lending institutions during the period of 15-28/4/2014 to follow up and take necessary measures to complete the development process, the following clarifications address the inquiries and observations discussed during these visits:

2. Disclosure of Guarantee and Irrevocable Commitment Limits

Guarantee/irrevocable commitment limits are disclosed according to the following mechanism:

• Disclose only the guarantee/irrevocable commitment limit granted to the client and update the existing balance with each utilization of the limit.
• In the event of issuing guarantees/commitments in multiple currencies from the same limit, all currencies are valued according to the currency of the granted limit.
• If a client is granted guarantees/commitments in different currencies under separate administrative approvals, each limit is disclosed separately.

2. Disclosure of Revolving Purchase Limits

To avoid duplicate disclosure of utilization transactions on revolving purchase limits, which negatively affects the client's credit rating as each utilization is read as a new disbursement, the same disclosure mechanism for guarantee and irrevocable commitment limits outlined in the first item above is adopted when disclosing revolving purchase limits.

3. Disclosure of Facility Guarantees

To regulate the disclosure of facility guarantees and given cases where facility grants involve more than ten guarantors, which may appear in Group Lending loans, the disclosure fields for guarantors have been expanded to declare all guarantees for a single facility regardless of the number.

4. Disclosure of Non-Performing Facilities (Legal Action)

To handle non-performing facilities (non-working facilities) as facilities where disclosing all their items is difficult due to challenges in communicating with borrowers, the mandatory classification for non-performing facilities (Legal Action (A) and Customer Status Evaluation (9)) will be removed, such that the components of non-performing facilities are disclosed based on the data available in the borrower's file.

5. Disclosure of Interest Rate and Interest Type

Since institutions do not charge interest on certain facility types (Guarantees F006, Irrevocable Commitments F008, and Overdraft Accounts F003), institutions are permitted to disclose the interest rate item in the financial file as (zero), while disclosing the interest type item with the code (9 - No Interest) in accordance with Appendix No. (12) attached to the circular.

6. Disclosure of Total Enterprise Assets

For the purpose of disclosing total assets of small and medium enterprises, and given that an enterprise may receive more than one facility in different currencies from the same institution, the total enterprise assets are disclosed valued in US Dollars regardless of the currency of the granted facilities.

7. Disclosure of Enterprise Geographic Classification

The geographic classification of the enterprise is disclosed based on the geographic region to which the enterprise's location, town, or village belongs, in cases where the location differs from that specified in the instructions.

General Provisions

• The first five working days of May are considered the submission period for the developed financial file according to the requirements of the circulars referenced at the beginning of this circular, for the purpose of completing the review of the new file.
• Institutions shall continue to disclose the borrowers' financial file according to the current file structure in parallel with the disclosure of the new file according to the developed structure until instructions are issued to cease operations on the current version.
• For the purpose of disclosing the new demographic data required on borrowers' files (income, income employment, national ID or social security for non-residents, borrower status for public sector employees) and on small and medium enterprise files (geographic classification, total enterprise assets, enterprise ID number, and owner nationality), we wish to confirm that data modification will occur only once through a complete file for borrowers and another for small and medium enterprises containing the aforementioned items, plus ID/passport/registration number, nationality, and facility file number, to be migrated by us as is until the end of April 2014.
• For the purpose of reporting personal data for facilities granted after April 2014, the personal files mentioned in the previous point will be received, covering new facilities only, until the period prior to the official launch of the new version, which will be specified in a subsequent circular.

Based on the foregoing, all institutions are requested to adopt the attached clarifications and modifications for disclosure purposes and to complete the development requirements to comply with the text of this circular.

Public Relations and Market Regulation Department
Palestine Monetary Authority

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Appendix No. (12)

Interest Type

	Interest Type Charged on the Facility:
1	Fixed	.1
2	Variable	.2
3	Flat	.3
9	No Interest	.4