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13.2

The PMA started publishing its indicator for the business cycle (PMABCI) on a monthly basis since November 2012. 


 IBAN Instructions | What is IBAN?

The PMA has drafted a Corporate Governance Code for banks to ensure that banks adopt and implement sound corporate governance practices and therefore maintain public trust and confidence in the Palestinian banking sector. The Code has been set at a high standard, consistent with the international best practices. It is based on the OECD principles of 2004, Basel Committee on Banking Supervision's paper on enhancing corporate governance for banking organizations that introduced eight principles for sound corporate governance practices for banks, the core principles for effective banking supervision of October 2006 and the subsequent methodology, and is consistent with existing relevant laws and regulations.

Fortunately, the Palestinian banking sector legal framework comprised mainly of the Banking Law No. (2) of 2002 as well as the PMA Law No. (2) of 1997 are being reformed with the assistance of the IMF, to meet best international practices and principles, therefore providing an adequate corporate governance legal environment that is essential to the successful development and introduction of a corporate governance code of best practices.

 

The code contains two sets of rules; instructions and guidelines. The instructions, representing the hard code, are drawn up from the Banking Law No. (2) of 2002 and its explanatory instructions and are supplemented with guidelines or a soft code that represent complementary good governance practices. Banks are required to comply with the instructions laid down in the code, while they will be subject to the "comply or explain" approach with regard to the guidelines. However, it is possible that the guidelines will turn into instructions in the future.

These rules are classified into nine principles formulated to cover the most important areas that, when appropriately applied, could ensure the proper functioning of the banking sector. These principles are related to:

  • Composition of the Board of Directors.
  • Structure and role of the Board of Directors.
  • Compliance, internal and external audit functions.
  • Disclosure and transparency.
  • Risk management.
  • Remunerations.
  • Rights and responsibilities of shareholders.
  • Rights and responsibilities of other stakeholders.
  • Code of conduct and ethics.