Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Instructions No. (12) of 2021

Regarding Incentivizing Banks to Finance Housing in the Jerusalem Governorate

Pursuant to the provisions of Law Decree No. (9) of 2010 on Banks, particularly Articles (40) and (72) thereof, and in accordance with the powers delegated to us, and in pursuit of the public interest, we have issued the following Instructions:

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Article (1)

Objective and Scope of Application

1. The provisions of these Instructions aim to incentivize banks to grant facilities or financing for housing purposes in the Jerusalem Governorate, in support and reinforcement of the resilience of its residents.
2. The provisions of these Instructions apply to all banks licensed by the Palestine Monetary Authority to conduct banking business in Palestine.

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Article (2)

Housing Financing in the Jerusalem Governorate

The bank shall be granted the following incentives upon granting facilities or financing for housing purposes in the Jerusalem Governorate:

1. Excluding the outstanding balance of retail facilities granted within the Jerusalem Governorate for housing purposes from the mandatory reserve base.
2. Accepting retail facilities granted within the Jerusalem Governorate for housing purposes within a credit risk ratio for the purpose of calculating the capital adequacy ratio, regardless of the type of collateral and a financing ratio of 35%.
3. Positively considering, when a guarantor entity is available for housing loans (Retail) granted within the Jerusalem Governorate, the acceptance of collateral at a 100% ratio for provisioning calculation purposes.

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Article (3)

Repeal of Conflicting Provisions

All provisions conflicting with these Instructions are hereby repealed.

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Article (4)

Implementation and Enactment

All competent authorities shall implement the provisions of these Instructions according to their respective jurisdictions, and these Instructions shall apply from the date of their issuance.

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Issued in Ramallah on 2021/06/10

Dr. Firas Malham
Governor

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Note:
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