Central Bank Scrutinizes Bank’s Compliance with Laws and Regulations
Investigation Launched to Ensure Transparency and Accountability
The Central Bank of Jordan has launched an investigation into the compliance of several banks with laws and regulations governing their operations, amid concerns over potential irregularities in bank conduct. The probe is ongoing, but preliminary findings suggest that some banks may have failed to meet certain requirements outlined in Article 26 of the Banking Law.
Article 26: Compliance Requirements
According to Article 26 of the Banking Law, the general manager of a bank must ensure compliance with laws, regulations, and directives in force. The law also requires the general manager to:
- Effect internal control on the conduct of bank operations
- Provide periodical status reports to the board of directors
- Recommend proposals for improving the bank’s business
Central Bank Takes Action
The Central Bank has summoned several banks to explain their compliance with these requirements. A Central Bank spokesperson stated, “We take these allegations very seriously and are committed to ensuring that all banks operate in accordance with the law.”
Revisions to Article 32: Strengthening Audit Committees
In related news, Article 32 of the Banking Law has been revised to strengthen the role of audit committees in detecting and preventing irregularities in bank operations. The revised article outlines the responsibilities of audit committees, including:
- Reviewing financial statements
- Verifying compliance with laws and regulations
- Examining internal auditing reports
Amendments to Article 34: Preventing Unauthorized Changes
Article 34 of the Banking Law has been amended to prevent unauthorized changes in bank ownership or share transfers. The revised article prohibits any transfer of shares or change in ownership without the prior written consent of the Central Bank, should this transfer lead to a person’s ownership of an effective interest in the bank’s capital or an increase in that interest’s percentage.
Protecting the Banking Sector
The amendments are designed to protect the stability and integrity of the banking sector. A Central Bank spokesperson warned, “We will not hesitate to take action against any bank that fails to comply with these requirements.”
Next Steps
As the investigation continues, banks are being advised to review their internal controls and ensure compliance with all relevant laws and regulations. The Central Bank has pledged to maintain transparency throughout the process and will provide regular updates on its findings.
Key Takeaways
- The Central Bank is investigating several banks for potential non-compliance with laws and regulations.
- Article 26 of the Banking Law outlines the general manager’s responsibilities in ensuring compliance with laws, regulations, and directives.
- Revisions to Article 32 strengthen the role of audit committees in detecting and preventing irregularities in bank operations.
- Amendments to Article 34 prevent unauthorized changes in bank ownership or share transfers.