Regulatory Alerts2024-01-01
Circular No. 11: Promotional Practices that Violate Principles of Competition
The Palestine Monetary Authority (PMA) issued Decision No. 11 to all banks operating in Palestine, addressing unprofessional promotional practices that violate fair competition principles. The PMA noted that some bank employees were spreading malicious rumors about other banks' financial stability to attract deposits, which threatens financial and economic stability. To counter this, banks are required to prevent unfair competition, educate employees, adopt internal policies criminalizing such actions, and include termination of services as a penalty for non-compliance.
[Palestine Monetary Authority Logo]
Palestine Monetary Authority PALESTINE MONETARY AUTHORITY
Decision No. (11) Issued by the Palestine Monetary Authority To all banks operating in Palestine Date: Monday, January 22, 2024
Subject: Promotional practices that violate principles of competition
Based on the provisions of Decision No. (9) of 2010 regarding banks, the Palestine Monetary Authority has learned that some bank employees are promoting the banking services offered by their bank to attract deposits in a manner that violates the principles of fair competition, specifically by spreading malicious rumors concerning another bank's ability to meet its obligations, the continuity of its operations, and its financial soundness.
The use of unprofessional tools and methods in competition by financial institutions and their employees is considered unacceptable behavior and threatens financial and economic stability in the State of Palestine. These dangerous practices require a set of immediate measures to limit their repercussions on the banking sector and the Palestinian economy. To maintain a stable, robust financial system built on professional and disciplined market competition, all banks must adhere to the following:
- Take all necessary measures to prevent unfair and unlawful competitive practices in all their forms.
- Instruct bank employees to exercise caution when promoting banking products and to avoid unlawful and negative competition, and to educate them about the consequences of such actions.
- Prepare and adopt an internal document that criminalizes employees' use of unfair competitive methods or the promotion of rumors that could threaten financial stability, affect public reputation and trust in banks, and lead to negative systemic behavior.
- Include in the bank's employee affairs system a penalty of termination of services if an employee engages in such behavior, in accordance with the provisions of the law.
Palestine Monetary Authority [Seal and Signature]