Financial Crime World

Regulatory Frameworks for Financial Institutions in Occupied Palestinian Territory

Strengthening the Banking Sector

The Palestine Monetary Authority (PMA) has been working tirelessly to improve regulatory frameworks for financial institutions in the occupied Palestinian territory. The goal is to strengthen the banking sector and ensure stability in the face of numerous challenges.

Measures Implemented by PMA

  • Developing regulations and instructions
  • Risk-based off-site and on-site supervision
  • Business continuity planning
  • Market conduct monitoring
  • Improving financial stability, deposit insurance, and macroprudential analysis
  • Implementing Basel II and its developments to enhance banking supervision and regulation
  • Consolidating the banking sector by liquidating problem banks, restructuring weak ones, encouraging mergers and acquisitions, and increasing bank capital

Palestinian Banking System

The Palestinian banking system consists of:

  • 16 conventional banks
  • 2 Islamic banks
  • Several specialized lending institutions, money changers, and foreign banks

Key statistics:

  • Net assets of the banking system: $11.54 billion
  • Customer deposits: $8.94 billion
  • Direct credit: $4.9 billion

Challenges Faced by PMA

Due to the Israeli occupation, the PMA faces significant challenges in implementing its regulatory framework, including:

  • Limited control over borders, movement, and access, creating trade barriers and hindering liquidity management
  • Lack of a domestic currency and inefficiencies in using three currencies (NIS, JD, and USD) create imported inflation
  • High political risk due to regional and local instability, as well as unstable government revenues

Coordination and Cross-Border Cooperation

To address these challenges, the PMA has:

  • Established coordination with other supervisory authorities through a Memorandum of Understanding (MOU)
  • Signed MOUs with central banks that have banks operating in Palestine
  • Exchanged experiences and best practices with international organizations, such as the Basel Committee on Banking Supervision (BCBS) and the Financial Stability Board (FSB)

Conclusion

Despite the challenges faced by the PMA, the authority remains committed to strengthening the banking sector and ensuring financial stability in the occupied Palestinian territory.

Contact Information

Palestine Monetary Authority P.O. Box 452, Ramallah - Palestine www.pma.ps info@pma.ps Tel: +970-2-415250 Fax: +970-2-409922