Palestine Monetary Authority Participates in the Launch of the “Strategic Framework for Islamic Financial Services in Palestine”
Ramallah and Al-Bireh – April 29, 2021
Palestine Monetary Authority participated today in the launch of the “Strategic Framework for Islamic Financial Services in Palestine," during a workshop held by Palestine Capital Market Authority, in cooperation with Palestine Monetary Authority, and in partnership with the International Finance Corporation, using zoom technology. The Governor of Palestine Monetary Authority, Dr. Feras Milhem, and the Chairman of the Board of Directors of Palestine Capital Market Authority Dr. Nabil Kassis, and the Minister of National Economy Mr. Khaled Al-Assili took part in the meeting as we as a number of banking officers and economists.
The Governor of Palestine Monetary Authority, Dr. Feras Milhem, stressed in his speech during the workshop that the preparation of the strategic framework for Islamic financial services in Palestine was a translation of one of the most prominent objectives of the Financial Inclusion Strategy in Palestine (2018) to enhance the quality, development and expansion of financial services in accordance with the provisions of Islamic law, as well as the role of this framework in laying the foundations of digital financial services, and promoting and expanding the concept of financial inclusion.
Dr. Milhem explained that Islamic banks were able to prove themselves by entering the Palestinian market and offering their products to meet demand, pointing out that the total assets of Islamic banks doubled from US$1.157 billion in 2014 to US$3.402 billion in 2020 achieving a compound annual growth rate of 19.9%, which is three times higher than that achieved by traditional banks of 7.4%. The assets of Islamic banks in Palestine accounted for 17.7% of the total assets of the banking system in 2020. Studies and indicators show a high demand for Islamic financial services and a gap between demand and supply, which requires increased supply and greater liquidity to meet current and future demand, according to Dr. Milhem.
Dr. Milhem pointed out that Palestine Monetary Authority sought, in accordance with its future plans, to integrate financial technology into the Islamic banking industry and encourage Islamic banks to adopt strategies for digital transformation and investment, in addition to developing a range of solutions to inject short-term Islamic liquidity to help Islamic financial service providers manage liquidity in accordance with Islamic law, adopt a periodic external Shari’a audit on Islamic banks and specialized Islamic lending institutions, develop the role of the Supreme Authority for Shariah Control and enable them to review and approve new products, and to provide guidance for the application of these products, with the aim of developing new financial services that meet the growing demand.
Dr. Milhem said he appreciated the joint efforts of Palestine Capital Market Authority and Palestine Monetary Authority to complete this strategic framework, and the International Finance Corporation for its support for these efforts. He also noted the role and importance of these efforts in the development and growth of the financial and banking sector in Palestine.
Mr. Iyad Nassar, the Supervisor of the Supervision and Inspection Department of Palestine Monetary Authority, participated in the second session of the workshop -under the title “Islamic Financial Services in Palestine: Opportunities and Challenges,” - where details of the strategic framework of Islamic financial services in Palestine were discussed and the questions and interventions of the audience were answered and explained.