Palestine Monetary Authority Issues a Circular to Banks and Lending Institutions on the Deduction Rate of Loans from Public Sector Employees’ Salaries for May
Palestine Monetary Authority today issued a circular to banks and lending institutions on the deduction rate from the salaries for May 2020.
Palestine Monetary Authority explained that its instructions came in the light of the irregular salary transfers of public sector employees for May 2020 and in order to ensure that Palestine Monetary Authority regulates loan repayments for employees receiving loans from banks.
Palestine Monetary Authority confirmed that its previous instructions to banks number (4) and (23) of 2020 on deferring repayments include June repayment for borrowers wishing for such deferral. And that its previous instructions to lending institutions number (5) and (24) of 2020 on deferring repayments include June repayment for borrowers wishing for such deferral.
The instructions to banks and lending institutions stated:
- Deduct 50% of the transferred payment of the salary or the monthly installment amount, whichever is lower, in order to pay all monthly facilities/financing obligations granted to the borrower and the borrowers whom he/she is the guarantor for and the resulting interest/monthly returns for borrowers who do not postpone May 2020 repayment during the current health crisis period.
- A full repayment deduction for employees who have sources of income other than salary, provided that this is established under the loan agreement.
- No delay interest or delay fines if the remaining portion of the repayment is deferred.
- The salary transfer commission (in banks) is only one time, regardless of the number of monthly salary transfer payments.
- Failure to declare the percentage of outstanding instalments resulting from the deferral of salary payments in the line of outstanding instalments paid to public sector employees on the Credit Information System.
- Dealing with employees of institutions that receive their budget from the Ministry of Finance with the same mechanism as public sector employees.