Law No. (3) of 2025 Regarding the Regulation of Loan Maturities, Installments, and Financial Leasing Payments

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Law No. (3) of 2025 Regarding the Regulation of Loan Maturities, Installments, and Financial Leasing Payments President of the State of Palestine, Chairman of the Executive Committee of the Palestine Liberation Organization. Based on the Basic Law of the Palestine Liberation Organization, and the Amended Basic Law of 2003 and its amendments, after reviewing Law No. (2) of 1997 regarding the Palestine Monetary Authority and its amendments, and Law No. (13) of 2004 regarding the Capital Market Authority and its amendments, and Law No. (9) of 2010 regarding Banks and its amendments, and Law No. (6) of 2014 regarding Financial Leasing, and Decision No. (132) of 2011 regarding the Licensing and Supervision System for Specialized Lending Institutions and its amendments, and based on the powers delegated to us, in pursuit of public interest, we have issued the following Law:

Article (1)
The words and expressions used in this Law shall have the meanings assigned to them below, unless the context indicates otherwise:

• Palestine Monetary Authority: The Palestine Monetary Authority.
• The Authority: The Capital Market Authority.
• Financial Institutions: Banks and specialized lending institutions licensed by the Palestine Monetary Authority, and financial leasing companies licensed by The Authority.
• Loans: Credit facilities of all types, whether direct or indirect financing forms granted by Islamic banks, and all types and forms of direct and indirect facilities granted by banks of all kinds, as well as loans granted by specialized lending institutions. A financial leasing contract shall be considered a loan for the purposes of this Law.
• Financial Leasing Payments: The installments paid by the lessee to the lessor in accordance with the provisions of the financial leasing contract.
• Customers: Borrowers who obtain loans from financial institutions under executed contracts between them, and the lessee shall be considered a customer for the purposes of this Law.

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Article (2)

1. This Law aims to achieve the following:
   a. Achieving financial and economic stability in Palestine. b. Protecting the rights of customers and financial institutions alike, thereby ensuring justice and balance between the parties.
   c. Enhancing the ability of borrowing customers to fulfill their financial obligations to financial institutions.
   d. Enabling the Palestine Monetary Authority and The Authority to take necessary measures to support the national economy in the face of economic or financial crises. e. Ensuring the continuity of the financial system and avoiding risks arising from the default of borrowing customers, lessees under financial leasing contracts, or financial institutions.
2. The provisions of this Law shall apply to all licensed financial institutions in Palestine.

Article (3)

1. Notwithstanding any provisions in bilateral agreements regulating loans or financial leasing contracts between financial institutions and the contracting parties, the Palestine Monetary Authority and The Authority, each within its respective jurisdiction, shall have the right to issue binding instructions to modify loan maturities and financial leasing payments and installments by extending the repayment period, restructuring debts and installments, or determining interest rates so that the interest rate does not exceed interbank lending rates, or the financing costs incurred by financial leasing companies.
2. The Palestine Monetary Authority and The Authority shall exercise the powers stipulated in this Article in any of the following cases:
   a. Economic or financial crises where Gross Domestic Product declines by 30% or more. b. Natural disasters or health crises.
   c. Wars and political instability situations.
   d. Any exceptional contingent circumstances affecting the repayment ability of borrowing customers and lessees under financial leasing contracts.
3. Instructions issued by the Palestine Monetary Authority and The Authority pursuant to Paragraph (1) of this Article shall be enforceable as of the specified date, and financial institutions are prohibited from violating their provisions under legal accountability according to Article (3/54) of Law No. (9) of 2010 regarding Banks and its amendments, Article (3/33) of Decision No. (132) of 2011 regarding the Licensing and Supervision System for Specialized Lending Institutions and its amendments, instructions issued by The Authority, and Law No. (6) of 2014 regarding Financial Leasing.

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Article (4)
All provisions inconsistent with this Law are hereby repealed.

Article (5)
All competent authorities, each within its respective jurisdiction, shall implement the provisions of this Law. It shall come into force from the date of its issuance and be published in the Official Gazette. Issued in Ramallah on: 16/01/2025 Gregorian Corresponding to: 16 Rajab 1446 Hijri Mahmoud Abbas President of the State of Palestine, Chairman of the Executive Committee of the Palestine Liberation Organization.

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