Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

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Circular No. (155/2015)

To all banks operating in Palestine

Date: Wednesday, July 15, 2015

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Subject: Increasing Paid / Allocated Capital

Pursuant to the Board of Directors' decision of the Palestine Monetary Authority regarding raising the minimum paid / allocated capital to balance banking operations in Palestine to ($75) million or its equivalent in currencies circulating in Palestine, and Instructions No. (2015/06) dated 15/07/2015 issued specifically, all banks are required to:

Comply with the following:

1. Submit a plan to increase the paid / allocated capital to $75 million within three months from the date hereof.
2. The plan must include the steps for capital increase and the necessary implementation timeline; such that the paid capital increase to $75 million is completed within three years ending on 15/07/2018.
3. Local banks must ensure that the capital increase plan addresses ownership concentration, such that the ownership percentage in no case exceeds 25% of the bank's shares or voting power for any person or group of persons acting together directly or indirectly, sharing a common interest, or related by kinship up to the second degree.
4. Banks refusing to comply with depositing a non-withdrawable capital deposit with the Palestine Monetary Authority at a rate of 20% of the minimum allocated capital specified by the Authority, must complete the deposit over a three-year period regardless of the paid capital amount or capital increase plan. The deposit rate shall be calculated on amounts of ($58), ($66), and ($75) million respectively, and the due amounts shall be transferred on July 18 of each year starting from 18/07/2016.

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Supervision and Inspection Department
Palestine Monetary Authority

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www.pma.ps

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