Regulatory Alerts2022-01-01
Added · Updated
Instructions No. 4 of 2022 Concerning Credit Concentration Risks
The Palestinian Monetary Authority imposes strict limits on credit exposures for licensed banks, prohibiting concentrations exceeding 25% of the capital base, or 20% for systemically important banks, without prior approval. Banks must not reach 10% exposure without permission and are capped at a total exposure sum of four times their capital base, with sector-specific limits set at 20% of the total credit portfolio. Existing concentrations exceeding these thresholds must be rectified within five years, while new excesses trigger a 200% risk-weighting for regulatory capital calculations, reduced to 150% if rated by an approved agency. The instructions also define groups of persons acting together based on control or economic interdependence and cancel conflicting provisions from Instructions No. 2 of 2015.