Regulatory Alerts2017-01-01
Circular No. 224: Preferential Collection Rights and Check Discounting
The Palestine Monetary Authority issued Circular No. 224 to mandate strict compliance measures for banks handling preferential collection rights and check discounting products due to their high associated risks. The directive prohibits accepting self-drawn or related-party checks, requires banks to establish approved internal policies, define clear administrative authorities, and set client-specific coverage limits based on verified economic activity and tangible collateral. Additionally, banks must implement robust monitoring mechanisms, ensure full transparency of these facilities in client financial profiles, and report all related concentrations and exposures in periodic submissions to the regulator.
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