Why Did the Monetary Authority Set Different Discount Rates for Loan Installments from the 2000 Shekel Payment?

SadaNews - The Palestinian Monetary Authority issued a circular to banks operating in Palestine outlining the mechanism for dealing with loan installments for public sector employees. This comes after the disbursement of a financial payment of 2000 shekels for each employee, which is part of the January 2026 salary. The decision aims to balance the financial commitments of employees with the reality of the financial crisis while also maintaining the stability of the banking system. The circular stipulated a full deduction of the installment amount from employees who received their full salaries or at least 95% of them, considering that this group has not been significantly affected by the crisis. An employee with a salary of 2100 shekels, who received 2000 shekels, lost only 100 shekels, meaning that the disbursement rate was 95%. However, those who received their full salary of 2000 shekels or less received all their dues, and thus it is natural for them to continue meeting their financial obligations to the banks without delay or justification. As for the other group of employees who received a payment against their salary of 2000 shekels, the Monetary Authority decided that the deduction would be only 10% of this payment, equivalent to 200 shekels. This symbolic deduction was not determined arbitrarily but was intended to avoid any issues that may arise in classifying debts due to fluctuations in the exchange rate against the installment amounts. It is also considered a necessary step to ensure the continued movement of borrowers' accounts and to avoid classifying their accounts as delinquent, which protects the employee from greater financial repercussions and maintains regularity in their relationship with the banks. With this measure, the Monetary Authority has provided a practical solution that alleviates the burdens on both employees and banks, especially after previous circulars had called for a deduction of 25% from the disbursed salaries for loan installments. The new decision ensures that accounts remain active and prevents the accumulation of financial problems that could affect the banking system as a whole. However, the current instructions regarding the deduction rates from the installments of government employees who received a full salary in the Gaza Strip remain unchanged, with a deduction rate of 25% from the transferred payment, which aligns with the difficult humanitarian conditions faced by the residents there, as SadaNews has learned.