Ramallah- H. E Mr. Mahmoud Abass- President of the State of Palestine- signed the Palestinian Deposit Insurance Corporation Law in a ceremony attending by the Governor of Palestine Monetary Authority, Dr. Jihad Al Wazir, the heads of the Banking Sector and Association of Banks in Palestine.
Dr. Alwazir described this step as a "historical achievement" for the state of Palestine in general, and for the PMA, the banking system in particular. He added that this institution will reinforce financial and banking stability and that its foundation at the appropriate time as the banking system is strong, stable and sound with high levels of equity and capital adequacy that is higher than recommended by the Basel Committee.
The law establishes The Palestine Deposit Insurance Corporation which aims at safeguarding small depositors, maintaining the stability of the banking system, and thus mobilizing more savings that would enable banks to play a better role in the economy. In particular, the corporation will minimize chances for financial crises by insuring 1.2 million depositors representing 93% of the depositors of licensed banks in Palestine. As per the law a percentage of insured deposits will be paid by the licensed banks in Palestine to the corporation, The Government will also contribute to the corporation's capital.
Dr. Al Wazir commended the President's support to maintaining financial stability in Palestine. He added that this law is the result of the intensive efforts in collaboration between the PMA, the Banking Association and World Bank experts.
The PMA joined the International Association of Deposit Insurers (IADI), which has more than 132 countries as members.
The Palestine Monetary Authority (PMA) is the emerging Central Bank of Palestine. Its overall purpose is to ensure price stability and contribute to the stability and effectiveness of the Palestinian financial system. PMA promotes sustained economic and financial growth of the Palestinian economy through the following:
- Effective and transparent regulation and supervision of Banks, Special Lending Institutions and Money Changers.
- Overseeing the implementation and operation of modern, efficient payment system.
- Development and employment of Monetary Policy designed to achieve price stability;
The PMA was initially established in 1994 by presidential decree as an independent institution and reinforced by the PMA law no. 2 of 1997 which outlined the full authority and autonomy of the PMA.
Facts about the Palestinian Banking System as end of April, 2013:
- Regulated Licensed banks are 17 (10 Foreign banks, 7 Local banks)
- Network of 232 branches & offices
- Ratio of Credit facilities/ Deposits is 54%.
- Customers Deposits is around USD7.8 Billion.
- Total Credit Portfolio USD 4.1 Billion
- Total assets USD 10.2 Billion
- Employing more than 5,207 staff
- Total number of Microfinance Institutions (MFIs) is 13 with 75 branches.
- Total number of licensed Money Changers is 256