Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Instructions No. (53) of 2018

Concerning the Classification of Credit Facilities, Provisions, and Accepted Collateral

Pursuant to the provisions of Decision-Law No. (9) of 2010 Concerning Banks, particularly Article (40) thereof, and in accordance with the authorities vested in us, and in pursuit of the public interest, we hereby issue the following Instructions:

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Article (1)

Scope of Application

The provisions of these Instructions shall apply to banks licensed by the Palestine Monetary Authority.

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Article (2)

Amendment of the Provisions of Item (Third)

The collateral acceptance ratios for vehicles, machinery, and equipment for the purpose of establishing provisions, as stipulated in Item (Third), paragraph (3) of Instructions No. (2008/01), are amended as follows:

A. Vehicles: The acceptance ratio is 50% of the insurance policy value or the market value, whichever is lower, for the first two years from the date of seizure, and 25% for the third and fourth years, provided that mortgage procedures are completed and the insurance policy is assigned in favor of the bank. Collateral will not be accepted for provision calculation thereafter, and the collateral is invalidated if a valid insurance policy or license is not available.

B. Machinery and Equipment: The acceptance ratio is 70% of the insurance policy value or the market value, whichever is lower, for the first two years from the date of seizure, and 35% for the third and fourth years, provided that mortgage procedures are completed in the Movable Property Security Rights Register and the insurance policy is assigned in favor of the bank,

C. Collateral will not be accepted for provision calculation thereafter, and the collateral is invalidated if a valid insurance policy is not available.

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Article (2)

Repeal

All provisions conflicting with these Instructions are hereby repealed.

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Article (3)

Implementation and Enforcement

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

Issued in the city of Ramallah on ... ... ... dated 2018/04/19

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Supervision and Inspection Department
Palestine Monetary Authority

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Ramallah - Palestine P.O. Box 452 | Tel: +970 2 2415250 | Fax: +970 2 2415310 | +970 2 2415310: Fax | +970 2 2415250: Tel | P.O. Box 452 Ramallah - Palestine Gaza - Palestine P.O. Box 4026 | Tel: +970 8 2825292 | Fax: +970 8 2844487 | +970 8 2844487: Fax | +970 8 2825292: Tel | P.O. Box 4026 Gaza - Palestine Email: info@pma.ps | Email: info@pma.ps www.pma.ps