Regulatory Alerts2023-01-01
Instructions No. (2) of 2023 Concerning the Amendment of Instructions No. (4) of 2022 Regarding Credit Concentration Risks
The Palestine Monetary Authority issued Instructions No. (2) of 2023 to amend its 2022 Credit Concentration Risks framework, introducing revised exposure thresholds, new credit risk mitigants, and preferential capital weighting for domestic economic sectors and government financing. The amendments set a 20% exposure limit for systemically important banks and 25% for others, authorize cash collateral and pledged Palestine Exchange-listed shares (calculated at 70% of market value) as risk mitigants, and apply 100% or 20% weighting to financing directed toward agriculture, industry, renewable energy, technology, healthcare, and Palestinian government bonds. Additionally, the rules streamline approval processes for low-risk or pre-authorized facilities, permit banks to bypass prior approval requests under specific conditions, and mandate the automatic revocation of approvals for unexecuted financing within 90 days.