The Council of Governors of the Arab Central Banks and Monetary Authorities Approves Recommendation to Endorse the Credit Registry System

Following a working paper, which Palestine Monetary Authority had prepared, the Council of Governors of the Arab Central Banks and Monetary Authorities approved, during the regular 41^stsession held in Abu Dhabi on September 17, 2017, the recommendation of the Arab Committee on Credit Information to endorse the Credit Registry System as means of handling excess borrowing and returned checks for insufficient balance in Arab countries. 

Mr. Shawwa pointed out the advanced professional level Palestine Monetary Authority reached, with all its departments and staff, which was reflected in its developed relations and effective participation and distinctive contributions to Arab and international conferences and meetings.  

The paper submitted by Palestine Monetary Authority addresses the most important tools that are known internationally and used to control granting credit, most prominently, establishing credit information office, controlling interest rates and commissions and fees, restricting banks not to exceed given concentration of credit granted to a person or a specific party a certain rate of the capital base of the bank, control debt to income rate, control loan amount ratio to real estate value, define credit share and banking risks, and make banks comply with setting up policies to granting consumer credit.

The paper of Palestine Monetary Authority also addresses borrowing from private sector establishments (the informal sector) – the private sector that is not subject to supervision of central banks or supervisory commissions. Dealing with the private sector firms to obtain goods and services in return for postdated checks has many credit and operational risks that directly affect the social and economic fabric including increase of unsecured debts and low quality portfolios and rapid increase in pressure from defaulting payments, unfair competition among illegitimate powers of informal sectors and official economy powers, increase in the rates of evading payment of taxes and fees and fines, encourage and facilitate money laundering, which would directly lead to increasing the gap between the rich and the poor. And the role of central banks in handling excessive borrowing and returned checks for insufficient balance. The paper by Palestine Monetary Authority states that central banks are getting ready to protect the safety of the banking system by supervising banks and ensuring the soundness of their functions and their financial centers by providing inclusive and accurate and updated information for users of the banking system through credit systems in credit information system, credit classification system, returned checks system, mortgage database, and granted facilities to small and micro businesses. 

The paper of Palestine Monetary Authority also addresses the Credit Registry System, which Palestine Monetary Authority uses, by introducing the System, its features, the objective of developing such system, the way it works, and the contents of the credit reports the System produces, which enable users to access data about clients’ credit history in the credit information system and the returned checks system.

Palestine Monetary Authority has developed credit information system that was consistent with international standards. The system is a key source that banks and lending institution resort to for accurate review and analysis of the credit situation of borrowers, which reduces credit risks and safeguards the quality of the credit portfolio.