Regulatory Alerts2009-01-01
Instructions No. 1 of 2009 Regarding the Cancellation of the Interest or Return Cap on Facilities and Financing
The Palestine Monetary Authority issued Instructions No. 1 of 2009 to formally abolish the statutory 9% cap on interest and return rates for banking facilities and financing. This directive mandates that all interest and return rates be determined through free market competition among banks, requiring financial institutions to immediately adjust their internal policies and accounts to ensure full regulatory compliance. The Authority will actively monitor and enforce adherence to this deregulation by continuously tracking the interest rates charged to customers.
Palestine Monetary Authority
Palestine Monetary Authority
Instructions No. (2009/1)
To all banks operating in Palestine
Date: Wednesday, January 28, 2009
Subject: Cancellation of the Interest or Return Cap on Facilities and Financing
Based on the provisions of Articles (60) and (72) of the Palestine Monetary Authority Law No. (2) of 1997 and its amendments, and Article (35) of the Banks Law No. (2) of 2002, and in order to enhance compliance with competition principles among banks, the cap on interest or return rates on facilities and financing, set at 9% according to the Ottoman Interest System of 1304 AH, is hereby cancelled. Interest and return rates shall be subject to free competition among banks, and all banks are required to take necessary measures to rectify their status and settle their accounts to ensure full compliance.
Furthermore, the Palestine Monetary Authority will conduct the necessary follow-ups to monitor the interest rates charged by banks to their customers.
Dr. Jihad Al-Wazir
Governor
Ramallah - Al bireh P.O.Box 452 - Tel.: 02-2415250 - Fax: 02-2409922
Gaza - P.O. Box 4026 - Tel.: 08-2825713 - Fax: 08-2844487
E-mail: info@pma.ps
Ramallah - Al-Bireh - P.O. Box: 452 - Tel.: 02-2415250 - Fax: 02-2409922
Gaza - P.O. Box: 4026 - Tel.: 08-2825713 - Fax: 08-2844487
www.pma.ps