Palestine_Deposit Insurance Fund

The Palestine Deposit Insurance Corporation (PDIC) was established end of 2013 based on the Deposit Insurance Law that was drafted with support of and collaboration with the World Bank and IMF experts. PDIC has started operations in 2014 and is tasked to stabilize the financial and banking system in the Palestinian Territories through protecting small deposits (up to US$ 10,000 and covering around 92 percent of depositors) at licensed banks operating in the Palestinian Territories in case of bankruptcy or liquidation of the banks. During the German-Palestinian Bilateral Negotiations held in Ramallah on 29th of June 2016 the two governments agreed to support the Palestinian Deposit Insurance with a grant of 10 million EUR to finance a major part of the capital contribution of the Palestinian government to PDIC as well as accompanying consultancy services including cost of software to support capacity building of PDIC and to contribute to the improvement of the deposit insurance law and regulations.

The tasks comprise:

1. Supporting the PEA in: Identification, procurement support and establishment of (i) an adequate risk-based premium system; (ii) a stress-test model; (iii) a Payout System;

2. Capacity building (e.g. on financial planning, training of staff).

3. Supporting PDIC in making improvement proposals for the existing Palestinian Deposit Insurance Law as well as elaboration of adjustments of existing legislation and regulations.