Regulatory Alerts2016-01-01
Instructions No. (07) of 2016 on Implementing Capital Adequacy Requirements under Basel II Regulations
The Palestine Monetary Authority issued Instructions No. (07) of 2016 to mandate the implementation of Basel II capital adequacy requirements for all licensed banks operating in Palestine. The directive establishes standardized definitions for credit, market, and operational risks, and requires banks to calculate their Capital Adequacy Ratio using the Standardized Approach for Credit Risk, incorporating external credit ratings mapped to six Credit Quality Steps. Additionally, it mandates the submission of an initial Internal Capital Adequacy Assessment Process (ICAAP) report within one year of issuance and repeals prior risk management instructions to ensure consistent regulatory compliance.
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