Palestine Monetary Authority

Palestine Monetary Authority

Circular No. (2013/79)
To all lending institutions operating in Palestine Date: Tuesday, June 18, 2013

Following the meeting held with lending institutions on May 27, 2013, at Sharakah Institution and attended by representatives of the software developers used by some institutions, where the meeting aimed to follow up on and discuss the accuracy of disclosing borrower data to the Credit Information System, the following clarifies the items discussed:

1. Disclosure of the customer's status assessment and a value of zero for outstanding unpaid installments is not permitted, and vice versa.

2. A borrower shall not be considered in default or reported as (2) unless a full 30 days have passed since the default date. In the month following data disclosure, the customer's compliance status shall be reversed as stipulated in the instructions.

3. Directly assessing a customer with classification (6), meaning a provision has been established, is not permitted. Compliance with the Credit Information System instructions requires sequentially grading the customer's assessment over time periods for installment repayment compliance, avoiding illogical jumps between classifications that negatively impact customer data, the accuracy of the Credit Information System data, and borrower credit ratings.

4. Reporting a customer's status as compliant with repayment and legal procedure (A), meaning "referral of the customer's file to the courts," is not permitted, as this reporting leads to a technical conceptual conflict that negatively impacts the accuracy of reported data and customer classification. Therefore, if a borrower's file is referred to the courts and the loan is restructured, the first report after legal procedures should indicate legal procedure (B) and classify the customer as (8). If the customer subsequently enters a repayment schedule agreement, report legal procedure (B) and classify the customer as (1). If the customer fails to comply with the agreement and returns to the default stage, report the customer's status as in default, while observing the sequential grading of the customer's status in default stages and legal procedure (A).

Accordingly, lending institutions are requested to take the necessary measures to make required amendments to comply with data disclosure instructions. Otherwise, appropriate legal measures will be taken.

Public Relations and Market Discipline
Palestine Monetary Authority

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Ramallah - Al Bireh P.O. Box 452 - Tel.: 02-2409920 - Fax: 02-2409922 Gaza - P.O. Box 4026 - Tel.: 08-2825713 - Fax: 08-2844487 E-mail: info@pma.ps www.pma.ps

Ramallah - Al Bireh P.O. Box: 452 - Phone: 02-2409920 - Fax: 02-2409922 Gaza - P.O. Box: 4026 - Phone: 08-2825713 - Fax: 08-2844487