Decree law gives Palestine Monetary Authority green light to promote ‘modern e-banking services’; Jihad Alwazir says new systems will increase efficiency while reducing risks

Author:Central Banking Newsdesk

Source: Central Banking | 20 Dec 2012

A decree law passed by Palestinian president Mahmoud Abbas has granted the Palestine Monetary Authority (PMA) the power to launch a national system for clearing and settling payments.

The new system gives the central bank scope to introduce a centralised system for settlement of financial transactions and automated clearing. This, the PMA said, would result in a "drop of costs, saving of time, and the development of new methods and systems that will enable banks to provide modern e-banking services."

Key features of the new system will include mechanisms that facilitate the acceptance of electronic signatures, linking of all banks and their branches with an "integrated electronic communication system" and unification of legal procedures.

Jihad Alwazir, the governor of the central bank, called the decree law a "significant step" towards replacing conventional paper-based payments systems with e-payments. The PMA said this would help promote investment in Palestine due to faster circulation of currency and a safer environment for transferring funds.

Riyad Awwad, the director of the payments systems department at the PMA, said the legal framework was an important precondition for establishing a modern payments system. The law defines the "mandate and responsibilities" of all parties involved in the organisation of payments in both ordinary and emergency situations. Awwad said the framework was "flexible and responsive", giving room to respond to the latest developments in payments technology.

Governor Alwazir noted the law was the first presidential decree to be passed since the United Nations recognised Palestine as a "non-member observer state" in November. He said this was "major achievement" for the PMA.