Central Bank of Jordan Issues Guidelines for Bank Management

Strengthening Banking Regulations and Ensuring Transparency

Amman, Jordan - In a move to reinforce banking regulations and guarantee transparency in bank operations, the Central Bank of Jordan has issued new guidelines for bank management.

Key Responsibilities of Bank General Managers

According to Article 26 of the law, the general manager of a bank is responsible for ensuring internal control over the conduct of bank operations and compliance with laws, regulations, and directives. Additionally, they must provide regular status reports to the board of directors and recommend proposals for improving the bank’s business.

Restrictions on Former Employees

Article 27 sets out rules for former employees of revoked or liquidated banks, stating that they cannot work in another bank without prior written approval from the Central Bank.

Employment of Non-Jordanian Staff

The law also regulates the employment of non-Jordanian staff at banks. According to Article 28, all foreign nationals working at a Jordanian bank must obtain a special permit from the Central Bank.

Article 34 outlines rules for changes in bank ownership or share transfers, stating that such transactions require prior written consent from the Central Bank if they result in a person gaining effective control over the bank’s capital or increasing their percentage of ownership.

Establishment of an Audit Committee

The guidelines also establish an audit committee to oversee bank operations and ensure compliance with regulatory requirements. According to Article 32, the committee must convene at least once every three months and review various aspects of bank operations, including financial statements, accounting measures, and regulatory compliance.

Key Takeaways:

Bank general managers must ensure internal control over operations and compliance with regulations.
Former employees of revoked or liquidated banks cannot work in another bank without prior approval from the Central Bank.
Foreign nationals working at a Jordanian bank require special permits from the Central Bank.
Changes in bank ownership or share transfers require prior written consent from the Central Bank if they result in effective control over the bank’s capital or increased ownership.

Reaction:

The new guidelines have been welcomed by the banking industry, which sees them as a step towards strengthening regulations and ensuring transparency in bank operations. The Central Bank has pledged to continue monitoring the implementation of these guidelines to ensure compliance with regulatory requirements.