Instructions No. 1 of 2025 Regarding the Handling of Debt Maturity Dates

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Palestine Monetary Authority

Instructions No. (1) of 2025
Regarding the Handling of Debt Maturity Dates

Based on the provisions of the Decree-Law No. (3) of 2025 concerning the regulation of loan tenors, installments, and finance lease payments, particularly Article (3) thereof, and based on the provisions of Law No. (2) of 1997 concerning the Palestine Monetary Authority and its amendments, and based on the provisions of Decision No. (132) of 2011 on the licensing and supervision of specialized lending institutions and its amendments, especially Articles No. (3, 21) thereof, and in accordance with the powers delegated to us, and in pursuit of the public interest, we have issued the following Instructions:

Article (1)
Objective and Scope of Application

1. The provisions of these Instructions aim to regulate procedures for handling debts that are partially or fully due, their maturity dates, and financing facility contracts and the resulting relationships with all parties.
2. The provisions of these Instructions apply to financing and facility contracts in the Gaza Strip.
3. The provisions of these Instructions do not apply to clients whose files and debts have been transferred to the judiciary.
4. The provisions of these Instructions apply to all specialized lending institutions licensed by the Palestine Monetary Authority.

Article (2)
Procedures for Handling Loans and Financing

The specialized lending institution must adhere to the following:

1. Deferring the repayment schedule for all installments for borrowers in the Gaza Strip, effective from the date 2023/10/01.
2. The deferral is implemented by granting a new loan/financing facility in which the due amounts are recorded.

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3. Subject to what is stated in Item No. (4), the collection of installments for the new loan shall begin concurrently with the maturity date of the original loan installments for borrowers whose debt burden is less than 50% of their income throughout the original loan period, and after the completion of repayment of the original loan for borrowers whose debt burden exceeds 50% of their income.
4. The collection of installments on loans and financing in the Gaza Strip shall begin from the date 2025/07/01.

Article (3)
Interest and Commissions

1. The specialized lending institution is prohibited from collecting interest/return on the new loan/financing that exceeds the interbank lending interest rate (6M SOFR) at the time of execution.
2. The specialized lending institution is prohibited from collecting any commissions or fees on the process of deferring repayment schedules.

Article (4)
Impact of Treatments on Contracts and Clients

1. The specialized lending institution may allow borrowers to reschedule or restructure debts according to the borrower's wish and repayment capacity, without imposing any commissions or fees on the borrower.
2. The specialized lending institution may allow exceeding the debt burden ratios for clients wishing to restructure their debts by no more than 10% over the ratios specified in the prevailing Instructions.

Article (5)
Right of Objection

1. The specialized lending institution must work to notify borrowers of the details of the modifications made to the debt maturity schedules through the communication channels available at the institution.
2. The borrower may, within a period of ten days from the date of issuance of these Instructions or from the date of notification by the institution, object to the deferral of the repayment schedule. In this case, the institution must commit to accepting the borrower's objection, whether the objection is made through approved communication channels or through the institution's branches.

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3. The lending institution must adhere to the following procedures upon receiving an objection from the borrower:
   a. Halt the implementation of the repayment schedule deferral and grant the client a two-week period to restructure the existing facilities, otherwise, the provisions of these Instructions shall apply. b. Work on scheduling/restructuring the loan in a manner consistent with the borrower's repayment capacity.
   c. Document the scheduling/restructuring process according to legally recognized standards.

Article (6)
Cancellation of Conflicts

Everything conflicting with the provisions of these Instructions is repealed.

Article (7)
Execution and Enforcement

All competent authorities must execute the provisions of these Instructions, each within its respective purview, and they shall apply from the date of their issuance.

Issued in the city of Ramallah, on the date: 2025/01/21.

[Signature]
Yahya Yahya
Governor

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