Palestine Monetary Authority Instruction No. 2 of 2011 Regarding Bank Licensing

Appendix No. (1) Application for License of a New Local Bank

Date: / / 20
Proposed Name of the Bank:
.................................................................................................................................................... .1 Proposed Address of the Head Office:
..................................................................................................................................................... .2 Proposed Addresses of Other Branches Included in this Application:
................................................................................................................................................. .1 ................................................................................................................................................. .2 ................................................................................................................................................. .3 ................................................................................................................................................. .4

.3
.4 Name and Address of the External Auditor Approved by the Monetary Authority:
Names of the members of the Supervisory Committee for Establishment, attach the CV of each member:
-6 -1
-7 -2
-8 -3
-9 -4
-10 -5
.5
The applicant must read the Licensing Instructions and provide us with the following documents:
List of full names of the founders, the amount of contribution of each, their nationality, place of residence, and their CVs, which must include qualifications and experience, provided that the following conditions are met:
a. That none of them caused the collapse or serious loss of a banking institution, specialized lending institution, or any other institution where they served as a senior executive or board member. b. That none of them has declared bankruptcy or failed to pay their debts such that they became delinquent. .1 .6

Certificate of good conduct and non-criminal record for the founders and persons expected to be appointed to senior positions for more than three months, issued in favor of the Monetary Authority, and their dates must be recent. Statement of sources of movable and immovable funds for each founder, accompanied by a comprehensive financial statement. Statement of first and second-degree kinship ties and interrelated or joint commercial interests among the founders, such that the contribution of a natural or legal person or a group of persons who work together directly or indirectly exceeds 10% of the authorized capital. Commitment from the founders including the following:
Covering no less than 20% and no more than 50% of the capital, and the remaining capital shall be allocated for public subscription. Commitment to comply with the laws in force in Palestine and the regulations and instructions issued by the Monetary Authority. Joint and several liability for establishment expenses in case the bank is not fully established and announced. Not to sell their shares or contributions before one year has passed since the bank commenced operations, except with prior written approval from the Monetary Authority. .5 Feasibility study including the future business plan and estimated budgets for the first three years of the bank's operation and the bases adopted for that, which must include the following:
Sources of funding and investment avenues.
Financial positions.
Profit and loss statement.
Cash flows.
Expected legal and liquidity levels.
Proposed organizational and administrative structure for the bank and credit, investment, risk management, internal control, and compliance policies, which must be consistent with governance practices in Palestine. We, the undersigned, as authorized representatives of the Establishment Committee, certify that the information provided in this application is complete and correct.

Name Signature Date
.1
Name Signature Date
.2
Name Signature Date
.3
.7

.4 Name Signature Date
For Internal Use Only
Name of Applicant
Name of Request Receiver:
Date of Receipt
.1
.2
Missing attachments not completed
Deficiencies completed on date:
Application fees paid according to receipt number:
Signature-----: ------- -- -------

Appendix No. (2) Application for License of a New Incoming Bank

Date: / / 20
Name of the Incoming Bank and Applicant and Address of the Head Office:

..................................................................................................................................................
.1
Proposed Address of the Regional Management:
.................................................................................................................................................
.2
Proposed Addresses of Other Branches Included in this Application:
................................................................................................................................................1

................................................................................................................................................2

................................................................................................................................................3

.............................................................................................................................................. .4 .3 Name and Address of the Proposed External Auditor for the Bank's accounts in Palestine:
...................................................................................................................
.4
Names of the Board of Directors members, attach the CV of each member:
-6 -1
-7 -2
-8 -3
-9 -4
-10 -5
.5
The applicant must read the Licensing Instructions and provide us with the following documents:
.1 Approval of the Board of Directors of the Bank to operate as an incoming bank.
.2 The establishment contract and the Articles of Association of the Parent Bank and its registration certificate, authenticated according to regulations. .6

The organizational and administrative structure of the Parent Bank and the proposed organizational and administrative structure for the Incoming Bank, including the proposed Regional Management and Branches, approved by the Board of Directors, and credit, investment, risk management, internal control, and compliance policies, consistent with best banking practices for governance in Palestine. .3 Audited financial reports of the Parent Bank for its operations for the last three financial years, and a model for its capital adequacy for the same period. .4 Feasibility study including the future business plan and estimated budgets for the first three years of the bank's operation and the bases adopted for that, which must include the following:
Sources of funding and investment avenues.
.1
Financial positions.
.2
Profit and loss statement.
.3
Cash flows.
.4
Expected legal and liquidity levels.
.5
.5
Certificate from the supervisory authority in the home country confirming that the Parent Bank is subject to its supervision, its financial soundness, its ability to face risks, and its compliance with the instructions and regulations issued by it (assurance data). .6 Signed commitment from the President and members of the Board of Directors of the Parent Bank including the following:
Commitment of the Incoming Bank to operate in accordance with the laws in force in Palestine and the instructions of the Monetary Authority. .1 Responsibility for all obligations of its branches in Palestine and ensuring the soundness of these branches and the Parent Bank bearing any losses that may be incurred by its branches in Palestine. .2 Transfer of the entire capital allocated for Palestine branches as determined by instructions from the Monetary Authority, and covering any deficit in the capital, and not transferring any profits outside Palestine without prior approval from the Monetary Authority. .3 .7 Documents authenticated according to regulations. Approval of the supervisory authority in the home country for its branching in Palestine, that such documents be... .8 .7 We, the undersigned, as authorized representatives of the Board of Directors, certify that the information provided in this application is complete and correct.

Name Signature Date
.1
Name Signature Date
.2
Name Signature Date
.3
.8

.4 Name Signature Date
For Internal Use Only
Name of Applicant
Name of Request Receiver:
Date of Receipt
.1
.2
Missing attachments not completed
Deficiencies completed on date:
Application fees paid according to receipt number:
Signature-----: ------- -- -------

Appendix No. (3) Application for License of Branches, Banking Offices, Currency Offices, and Marketing Offices
Date: / / 20
.1 Name of the Bank Applicant:
.2 Area of the required branching:
.3 Form of the required branching:
The applicant must read the Licensing Instructions and provide us with the following documents:
.1 Approval of the Board of Management to open the Branch/Office.
Commitment of the Chairman of the Board of Management to open the Branch/Office within the specified period.
Approval from the supervisory authority in the home country for incoming banks to branch in Palestine.
Economic feasibility study for opening the Branch/Office, including estimated budgets for the expected capital for the next three years. Proposed organizational structure for the Branch/Office consistent with best banking governance practices. Any conditions and requirements that the Monetary Authority deems necessary for considering the submitted application. .4 "I, the undersigned, as authorized by the Board of Management, certify that the information provided in this application is complete and correct." Name Signature Date For Internal Use Only Name of Applicant Name of Request Receiver Date of Receipt .1 .2 Missing attachments not completed Deficiencies completed on date:

Application fees paid according to receipt number: Signature:_____________________

Appendix No. (4) Application for External Branching of a Local Bank
Date: / / 20
.1 Name of the Bank Applicant:
.2 Area of the required branching:
.3 Form of the required branching:
The applicant must read the Licensing Instructions and provide us with the following documents:
.1 Approval of the Bank's Board of Directors to open the Branch/Office.
.2 Economic feasibility study for opening the Branch/Office, including estimated budgets for the expected financial position for three financial years and the activities the Branch/Office will conduct. .3 Procedures of the host supervisory authority and conditions for granting the license and instructions regarding the submission of external branches to on-site inspections by the home supervisory authority, whether periodic or special. .4 Proposed organizational structure for the Branch/Office. .5 Written commitment from the Chairman of the Board of Directors of the Bank including the following:
.1 Commitment to any instructions issued by the Monetary Authority regarding the activity of external branches. .2 Commitment to the laws of the host country and the instructions of the supervisory authority therein. .3 Provide all data and reports required by the Monetary Authority regarding the activity of the external Branch/Office. .4 Provide the Monetary Authority with the following regarding the external banking presence:
. Any losses incurred by the Bank's branches or offices abroad and the Bank's failure to cover all losses without obtaining prior written approval from the Monetary Authority. .4

Transfer of annual profits realized by the Branch and Offices to its headquarters and showing this in the consolidated accounts of the Bank, considering the instructions of the supervisory authority in the host country. Internal and external audit reports on the work of external branches and offices. Any directives from the host supervisory authority and any supervisory reports directly related to the work of the external branches and offices. Annual and interim financial statements of external branches and offices. Assessment by the General Management of the various risks facing its external branches and the sufficiency of provisions and reserves. A written policy regulating the relationship between the General Management in Palestine and external branches regarding auditing. Any conditions and requirements that the Monetary Authority deems necessary for considering the submitted application. . "I, the undersigned, as authorized by the Board of Management, certify that the information provided in this application is complete and correct." Name Signature Date .5 For Internal Use Only .6 Name of Applicant Name of Request Receiver Date of Receipt Missing attachments not completed .1 .2 Deficiencies completed on date:
Signature:
Application fees paid according to receipt number:

Appendix No. (5) Application for License of Representation Offices for Local Banks Abroad
Date: / / 20
Name of the Bank Applicant:
..................................................................................................................
.1
Proposed Address of the Representation Office:
..................................................................................................................
.2
The applicant must read the Licensing Instructions and provide us with the following documents:
...................................................................................................................
Signed commitment from the Chairman of the Board of Directors including the following:
.1 Commitment to any instructions issued by the Monetary Authority regarding representation offices.
.2 Commitment to the laws of the host country and the instructions of the supervisory authority therein.
A-
B- Approval of the Bank's Board of Directors to open a representation office.
C- Business plan including a feasibility study for opening a representation office outside Palestine.
D- Procedures of the host supervisory authority and conditions for granting the license.
E- Proposed organizational structure for the representation office.
F- Activities that the representation office will conduct.
G- Any conditions and requirements that the Monetary Authority deems necessary and essential for considering the submitted application. .3 "I, the undersigned, as authorized by the Board of Management, certify that the information provided in this application is complete and correct." .1 Name Signature Date .4 .5 For Internal Use Name of Applicant Name of Request Receiver Date of Receipt Missing attachments not completed .1

.2
Deficiencies completed on date:
Application fees paid according to receipt number: Signature:____________________ 2/2

Appendix No. (6) Application for License of Representation Offices for Incoming Banks in Palestine
Date: / / 20
.1 Name of the Bank Applicant:
.2 Proposed Address of the Representation Office:
.3 Name and Address of the Proposed External Auditor for the Representation Office's accounts in Palestine:
.4 Location and Nationality of the Head Office:
The applicant must read the Licensing Instructions and provide us with the following documents:
.1 Approval from the supervisory authority in the home country to open a representation office in Palestine.
.2 Approval of the Board of Directors to open the representation office.
Commitment of the Chairman of the Board of Management to open the representation office within the specified period and the commitment of the representation office to operate in accordance with the laws in force in Palestine and the instructions of the Monetary Authority. .3 .4 Proposed organizational structure for the Office. .5 Establishment contract and Articles of Association of the Parent Bank, authenticated according to regulations. .6 Audited financial center of the Parent Bank for the last three years. .7 Registration certificate of the Bank in the country of origin, authenticated according to regulations. .8 Activities that the representation office will conduct. .5

.9 Any conditions and requirements that the Monetary Authority deems necessary for considering the submitted application. "We, the undersigned, as authorized representatives of the Board of Management, certify that the information provided in this application is complete and correct." .1 Name Signature Date .2 Name Signature Date .3 Name Signature Date .4 Name Signature Date .6 .7 For Internal Use Only Name of Applicant Name of Request Receiver Date of Receipt .1 .2 Missing attachments not completed Deficiencies completed on date:
Application fees paid according to receipt number: Signature:_____________________

Appendix No. (7) Application for Transfer of Banks' Management, Branches, or Offices
Date: / / 20
.1 Name of the Bank Applicant:
.2 Form of the branch to be transferred: Proposed Location for the Move:
Total Cost Incurred by the Move: Expected Time Period for the Move Process:
.3
Reasons and Justifications for the Move:
.1
.2
.3
.4
.5
.6
.4
Documents to be attached to the application:
.1 Approval of the Bank's Board of Directors for the move.
.3 Copy of the lease contract/sale deed for the new headquarters.
Detailed plan for the move process, and how work will transition from the old headquarters to the new one, according to specific timelines. .4 .5 Any conditions and requirements that the Monetary Authority deems necessary and essential for considering the submitted application. . 5 .6 ".We, the undersigned, as authorized representatives of the Board of Management, certify that the information provided in this application is complete and correct." .

.1 Name: Signature Date
.2 Name: Signature Date
.3 Name: Signature Date
.4 Name: Signature Date
.7 For Internal Use Only
Name of Applicant:
Name of Request Receiver:
Date of Receipt:
.1
.2
. 3
Missing Request Attachments not received:
Application fees paid according to receipt number: Signature:
2/2

Appendix No. (8) Application for Temporary Closure of Banks' Branches or Offices
Date: / / 20
.1 Name of the Bank Applicant:
.2 Area of the branch to be closed:
.3 Form of the branch to be closed:
Reasons and Justifications for Closure:
.1
.2
.3
.4
.5
.6
.4
Documents to be attached to the application:
.1 Approval of the Bank's Board of Directors for the temporary closure and the time period for the closure.
Bank's plan related to the temporary closure process, including how to deal with customer accounts and provide services. .2 .3 Any other documents that the Authority deems necessary. . 5 .5 ".We, the undersigned, as authorized representatives of the Board of Management, certify that the information provided in this application is complete and correct." .

.1 Name: Signature Date
.2 Name: Signature Date
.3 Name: Signature Date
.4 Name: Signature Date
.6 For Internal Use Only
Name of Applicant:
Name of Request Receiver:
Date of Receipt:
.1
.2
. 3
Missing Request Attachments not received:
Application fees paid according to receipt number: Signature:
2/2

Appendix No. (9) Application for Permanent Closure of Banks' Branches or Offices
Date: / / 20
.1 Name of the Bank Applicant:
.2 Area of the branch to be closed:
.3 Form of the branch to be closed:
Reasons and Justifications for Closure:
.1
.2
.3
.4
.5
.6
.4
Documents to be attached to the application:
.1 Approval of the Bank's Board of Directors for the closure of the Branch or Office.
Plan for the closure process of the Branch or Office, including how to deal with customer accounts and provide services and the time period necessary to complete closure procedures. .2 .3 Any conditions and requirements that the Monetary Authority deems necessary for considering the submitted application. . 6 .7 ".We, the undersigned, as authorized representatives of the Board of Management, certify that the information provided in this application is complete and correct." .

.1 Name: Signature Date
.2 Name: Signature Date
.3 Name: Signature Date
.4 Name: Signature Date
.8 For Internal Use Only
Name of Applicant:
Name of Request Receiver:
Date of Receipt:
.1
.2
. 3
Missing Request Attachments not received:
Signature:
Application fees paid according to receipt number:
2/2

Appendix No. (10) Application for Construction of Headquarters for Banking Business Management in Palestine
Date: / / 20
.1 Name of the Bank Applicant:
.2 Area where the headquarters is to be built:
Form of the branch for which a headquarters is to be built to conduct banking business:
General Management/Regional Branch Office ..........
.3
Documents to be attached to the application:
Approval of the Board of Directors to build the Management (General/Regional) and/or Branch/Office, and if the Bank is incoming, attach approval from the supervisory authority in the home country. .1 The engineering plan for the proposed building in two and three dimensions (2D 3D) prepared by a specialized engineering company, showing the distribution of units and departments and meeting all general security and safety requirements, including identifying emergency exits for all floors of the building, and facilities suitable for people with disabilities. .2 Preliminary permit from the Civil Defense on the building plans indicating the availability of general safety procedures. .3 .4 The time period necessary to complete the construction and equip it. Any conditions and requirements that the Monetary Authority deems necessary and essential for considering the submitted application. .5 . 4 ".We, the undersigned, as authorized representatives of the Board of Management, certify that the information provided in this application is complete and correct." . .1 Name: Signature Date .2 Name: Signature Date .3 Name: Signature Date .4 Name: Signature Date .5

.6 For Internal Use Only
Name of Applicant:
Name of Request Receiver:
Date of Receipt:
.1
.2
. 3
Missing Request Attachments not received:
Application fees paid according to receipt number: Signature:
2/2

Appendix No. (11) Application for Purchase of Headquarters for Banking Business Management in Palestine
Date: / / 20
Name of the Bank Applicant:
.................................................................................................................
.1
Area where the headquarters is to be purchased:
.................................................................................................................................................
.2
Form of the branch for which a headquarters is to be purchased to conduct banking business:
.................................................................................................................................................
.3
Documents to be attached to the application:
Approval of the Bank's Board of Directors to purchase the headquarters, specifying the purpose of the purchase, whether it is to build a management, branch, or office, or management and branch together. A- B- Approval of the supervisory authority in the home country if the Bank is incoming. C- The Bank must specify in its application whether the intended purchased headquarters will be a management headquarters, a new branch/office (new branching), or a transfer of its management or an existing branch/office. D- The actual cost of purchase and the estimated cost of equipping the headquarters and the period necessary for equipping. E- The engineering plan of the building in two and three dimensions (2D 3D) prepared by a specialized engineering company, showing the distribution of units and departments consistent with the approved organizational structure of the Bank, and meeting all general security and safety requirements, including identifying emergency exits for all floors of the building, and facilities suitable for people with disabilities. F- Permit from the Civil Defense indicating the availability of general safety procedures in the building. G- Any conditions and requirements that the Monetary Authority deems necessary for considering the submitted application. .4 .5 ".We, the undersigned, as authorized representatives of the Board of Management, certify that the information provided in this application is complete and correct." .

.1 Name: Signature Date
.2 Name: Signature Date
.3 Name: Signature Date
.4 Name: Signature Date
.6 For Internal Use Only
Name of Applicant:
Name of Request Receiver:
Date of Receipt:
.1
.2
. 3
Missing Request Attachments not received:
Application fees paid according to receipt number: Signature:
2/2

Appendix No. (12) Requirements for Equipping Branches/Offices

Requirements for Equipping a Bank Branch/Office

Building Equipment:

• The area designated for customers must be proportional to the size of the headquarters.
• Provision of a fortified room for the branch safe, branch safes, original documents, safety deposit boxes, etc.
• Provision of a fortified room for the IT room in case servers are available at the branch.
• The area designated for employees must be proportional to the number of employees.
• The headquarters area must be proportional to whether the headquarters is a branch/office.
• Provision of public facilities at the headquarters.
• Provision of emergency exits for each floor.
• Equipment suitable for people with disabilities.
• Parking spaces for the public dealing with the Bank, including spaces for people with disabilities.

Administrative Aspects:
Documents Required to be Provided to the Monetary Authority Inspection Team:
.1 Organizational chart (organizational structure).
.2 Copy of the lease contract/ownership deed.
.3 Copy of insurance policies (fire insurance, theft insurance, assets, employees).
.4 List of internal phone numbers for all departments and employees.
.5 Fortification certificate for fortified rooms, certified by an approved engineering office.
.6 Security safety certificate issued by the Civil Defense Directorate.
.7 Agreement for connection with security agencies.
.8 Technical report on the operational capacity size of the electrical generator, the actual load size on the generator, and the amount of fuel necessary to run the generator in case of a 30 working-day interruption. Records and Documents Required for the Monetary Authority Inspection Team to Review:

.1 Policies, work procedures, and internal regulations for employees.
.2 Job descriptions.
.3 Administrative and financial authorities.
.4 Fixed assets register.
.5 List of authorities granted on information systems.

Office Equipment and Machinery:
First: Computer Room Equipment:
.1 Server/direct connection to a central server if available at the branch.
.2 Central UPS capable of running electrical loads at the Branch/Office.
.3 Adequate cooling for the computer room.
.4 Central fire extinguishing devices inside the room.
.5 Manual fire extinguishing devices inside the room.
.6 Anti-theft security system inside the room.
.7 Surveillance camera inside the room.
.8 Raised insulated flooring inside the room.
.9 Access Door system on the computer room connected automatically to a program that records employee entry and exit according to their employee numbers.

Second: Additional Backup Storage Equipment "system backup":
.1 Availability of written policies and procedures for backup storage.
.2 Water-resistant and fire-proof safe for backup storage, number of copies...........

Third: Safe Room Equipment:
.1 Suitable iron racks, number...........
.2 Suitable doors for the fortified room.
.3 Central fire extinguishing devices inside the room.
.4 Anti-theft security system inside the room.
.5 Surveillance camera inside the room.
.6 Surveillance camera outside the room.

Fourth: Teller Room/Rooms Equipment:
.1 Access Door system on the teller room connected automatically to a program that records employee entry and exit according to their employee numbers. .2 Availability of a counter separating tellers and customers. .3 Anti-theft security system inside the room. .4 Surveillance camera inside the room. .5 Money counting machines. .6 Counterfeit detection machines. .7 Check reader device "Micer reader". .8 Typewriter for employees. .9 Seats for employees. .10 Alarm bell near each teller employee. .11 Calculators. .12 Computers. .13 Computer network. .14 Printers. .15 Photocopiers. .16 Stationery and office supplies. .17 Scanners (scanner).

Fifth: Telecommunications Network Equipment:
.1 Internal telephone exchange.
.2 Telephone devices for employees.
.3 Fax machines.
.4 Device for recording telephone calls.

Sixth: Emergency Exit Equipment:

• Provision of emergency exits for each floor.
• Internal and external surveillance cameras for emergency exits.

.1 Sturdy doors for emergency exits.
.2 Lighted signboards indicating the presence of emergency exits (operating during power outages).

Seventh: Customer Hall Equipment:
.1 Provision of suitable seats for customers.
.2 Currency and interest rate board.
.3 Surveillance camera for the hall.
.4 Suitable air conditioning/heating.

Eighth: Protection and Security Equipment:
.1 Internal surveillance cameras.
.2 External surveillance cameras.
.3 Recording device for all cameras with storage capacity sufficient for one full year and high resolution.
.4 Connection system with security devices.
.5 Daytime security guard (security work limited to guarding only).
.6 Security system (anti-theft).
.7 Monitoring screen.
.8 Fire alarm system.
.9 Manual fire extinguishers.
.10 Guards for windows and doors.

Ninth: Electrical Generator Equipment:
.1 Availability of a suitable electrical generator for the headquarters.
.2 Availability of fuel tanks for the generator sufficient...