Regulatory Alerts2021-01-01
Circular No. 225-2021 Regarding International Financial Reporting Standard 9
The Palestine Monetary Authority issued Circular No. 225-2021 mandating all Palestinian banks to appoint a qualified external auditor to independently review their models, methodologies, and hedging levels for calculating expected credit losses and asset classifications under IFRS 9. Banks must secure prior written approval for the external contract, ensure the auditor is completely independent from model design or internal audit functions, and submit full verification reports by February 2022. The directive further requires strict compliance with forward-looking Stage 3 provisioning, robust internal controls, and comprehensive documentation of credit risk assessment methodologies, default definitions, and macroeconomic indicators as outlined in the circular's appendix.