Supervisory and Control

In line with international banking standards of self-regulation and compliance, PIB’s Compliance Control Department was created as an independent function tasked with identifying and assessing the risk of non-compliance with laws and regulatory requirements. The Department assesses the risk of non-compliance and any other resulting reputational damage or financial losses that may subsequently follow.

The Compliance Control Department provides guidance to all of the Bank’s departments with the aim of promoting a culture of compliance thereacross, as well as implements all necessary measures to abide by international and tax cooperation laws, including the Foreign Account Tax Compliance Act (FATCA).

The Palestine Islamic Bank is committed to applying sound banking rules and legal norms in order to prevent any illegal activity or financial irregularity. PIB’s policy has been developed in line with the legal provisions of AMLA 20/2015 and other instructions issued by the Palestine Monetary Authority, as well as relevant international standards and regulations.

The Palestine Islamic Bank is committed to adhering to all local and international laws and directives, including the International Financial Action Task Force (FATF) recommendations, the UN Security Council resolutions and the decisions of the Basel Committee on combatting money laundering and financing of terrorism through comprehensive policies and procedures approved by the Board of Directors.

The Palestine Islamic Bank is committed to universally adopted principles and policies with respect to risk management. The Bank maintains a strong risk management environment to manage the balance between risk incurred and revenue generated, while striving to achieve high-level returns on the Bank’s portfolio as a whole whilst mitigating potential risks.

As a result, PIB has developed a common framework for risk management covering all types of key risks, such as credit risks, market risks, operational risks, and liquidity risks that the Bank faces as part of the normal course of conducting business.

In this respect, the Board of Directors determines the overall levels of risk and diversification and asset allocation strategies for each fund and each economic activity, geographical area, currency and timed deposits.

The following are the basic features of our Risk Management Policy:

• The Board and the Risk Management Committee adopt policies, regulations and comprehensive action programs and procedures designed to effectively manage risk and to provide guidance and insights to manage the Bank’s risks.
• The Board and the Risk Management Committee continuously review and approve the scenarios that are used in risk analysis and assumptions measurement mechanisms.
• Risk management is a priority and essential policy and procedure for the Bank and is considered a key competence for all employees.
• The Bank also applies a rigorous auditing policy as part of the Bank’s risk management application framework.
• The Bank implements the decisions and instructions according to the Basel II recommendations, as well as those of the Palestine Monetary Authority (PMA), issued in particular within the same framework, as follows:
• Application of capital adequacy within the Basel II framework, which has set the standards for new regulations on the calculation of capital adequacy and maintenance of a minimum capital requirement to cover credit risks and markets (as a standard entry methodology), as well as other operational risks (according to agreed benchmark).
• The Bank also implements stress tests within the second pillar of the Basel II framework; such tests are intended to strengthen the process of identifying and controlling risks, as well as of providing complementary risk management tools to manage risks and improve the Bank in terms of capital and liquidity.
• The Bank also regularly develops written policies and procedures in relation to its foundations, which are then followed by an internal evaluation of its capital (ICAAP), aiming at developing and ensuring better usage of risk management methodologies, in addition to measuring and assessing capital adequacy to absorb all potential Bank risks.
• The Risk Management Department also assists the Senior Management in the effective control and management of risks, by:
• Ensuring that the Bank's overall strategy and risk policies, procedures and methodologies are compatible with the acceptable risk limits.
• Evaluating and analyzing the Bank's risk profile, as well as applying and developing dedicated methodologies to monitor risks.
• Designing and developing clear criteria to define and identify each type of risk.
• Developing dedicated methods and methodologies to measure each type of risk.
• Auditing the policies and procedures in place to protect the Bank from all potential risks it may face.
• Working on coordinating efforts to implement the decisions of the Basel II framework and Palestine Monetary Authority instructions.
• Recommending strategies and actions to mitigate the potential risks.
• Ensuring upkeep with infrastructure for risk management and internal control of changes and developments.
• Preparing, updating and evaluating business continuity management plans and making necessary recommendations and adjustments.
• Performing stress tests periodically in accordance with approved policies and instructions.

PIB’s internal auditing procedures are conducted as an independent, objective activity to ensure quality and to improve and add value to operations through the application of disciplined methods in order to develop and evaluate the effectiveness of our risk management activities. This is done in accordance with international standards and compliance regulations and in line with best practices adopted in the banking sector.

The Internal Auditing Department reports administratively and technically to the Board’s Review and Audit Committee, thus ensuring independence from the Bank’s Executive Management. The Internal Audit Department applies a methodology of risk-based auditing and does regular checks on all Bank departments and branches in relation to the work plan approved by the Board’s Review and Audit Committee.

• Palestine Islamic Bank AML Policy
• Wolfsberg AML Questionnaire
• Certificate of Incorporation
• PMA License
• Article of Association
• W-8BEN-E