Regulatory Alerts2015-01-01
Circular No. 80 Credit Report - Enhanced Version
The Palestine Monetary Authority issued Circular No. 80 to update the credit reporting system by specifying disclosure thresholds for delinquent subscribers of Al-Watania Mobile Company (2,000 NIS for individuals, 15,000 NIS for entities) and Akram Sebtani & Sons Company (all clients using deferred payment checks for installment purchases). The circular clarifies that only court rulings involving banking or specialized lending institutions will be reported, and notes that this new data will be temporarily excluded from the borrower classification system until agreements are finalized with other economic sectors. Additionally, banks are mandated to immediately incorporate existing private sector debt into their Debt Burden Ratio (DBR) calculations to mitigate overindebtedness risks and protect consumers.
Palestine Monetary Authority
PALESTINE MONETARY AUTHORITY
(2015/80) Circular No.
To all banks operating in Palestine
Date: Wednesday, May 20, 2015
Subject: Credit Report - Enhanced Version III
Further to PMA Circular No. (2014/183) dated 17/12/2014 regarding the developmental provisions of the credit information system, which includes additional updates to the credit report concerning data for certain public and private companies (court rulings, Al-Watania Mobile Company, Akram Sebtani & Sons Company), we wish to highlight the following:
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Disclosure of data for delinquent subscribers with Al-Watania Mobile Company applies to individuals with unpaid bills of 2,000 NIS (two thousand shekels) or more, and to companies/institutions with unpaid bills of 15,000 NIS (fifteen thousand shekels) or more.
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Disclosure of data for clients of Akram Sebtani & Sons Company applies to all clients who obtained goods in exchange for deferred payment checks structured as monthly installments.
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Court rulings are limited only to those related to banking cases where one of the parties is a banking institution or a specialized lending institution.
Accordingly, please be advised that the aforementioned data will not be subject to the credit evaluation process under the borrower classification system. The risk assessment surrounding the new data will be accumulated for bank management until the disclosure of data for all other mentioned economic sectors is completed through agreements with them this year.
Regarding the calculation of the Debt Burden Ratio (DBR), we request all banks, effective immediately, to take into account the existing private sector debt burden on potential borrowers and incorporate it into the ratio calculation. This aims to manage overindebtedness risks, protect banking product consumers, and ensure obligation repayment according to contract terms.
Please disseminate this circular to credit officers in headquarters and branches for their awareness and compliance.
Public Relations and Market Discipline Department
Palestine Monetary Authority
Ramallah - Palestine PO. Box 452 | Tel: +970 2 2415250 | Fax: +970 2 2409922 Gaza - Palestine PO Box 4026 | Tel: +970 8 2825292 | Fax: +970 8 2844487 Email: info@pma.ps