Jordan Tightens Banking Compliance Regulations to Ensure Financial Stability

Amman, Jordan - Strengthening the Compliance Framework for Banks

The Central Bank of Jordan has issued a series of regulations aimed at ensuring the stability and soundness of the country’s banking sector. The new regulations, which came into effect on [date], are designed to strengthen the compliance framework for banks in Jordan.

Key Measures

• Implementation of International Financial Reporting Standard 9 (IFRS 9), requiring banks to adopt a more robust approach to risk management and provisioning
• Instructions on corporate governance, requiring banks to maintain high standards of transparency and accountability
• New regulations for money exchange companies, including requirements for licensing and business controls, aimed at preventing money laundering and terrorist financing

Bank Licensing Guidelines

The Central Bank has also issued guidelines for bank licensing, which outline the minimum capital requirements for licensed banks. The guidelines are designed to ensure that only financially sound institutions are granted licenses to operate in Jordan.

Electronic Money Transfer Business

Instructions on electronic money transfer business have been issued, requiring banks to maintain high standards of security and customer protection.

Stricter Rules for Major Foreign Currencies and Precious Metals

The new regulations introduce stricter rules for dealing in major foreign currencies and precious metals on margin basis for the benefit of customers. This move is aimed at preventing excessive risk-taking by banks and ensuring that they operate with sufficient capital buffers.

Industry Reaction

Banking industry insiders welcome the new regulations, saying they will help to improve the overall risk management practices of banks in Jordan.

“We appreciate the Central Bank’s efforts to strengthen the compliance framework for banks in Jordan,” said a banking executive. “The new regulations will help us to better manage risks and maintain high standards of transparency and accountability.”

Additional Guidelines

• Guidelines on effective interest ownership, requiring banks to maintain accurate records of customer transactions
• Instructions for dealing with foreign currencies and precious metals, requiring banks to maintain high standards of security and customer protection
• Guidelines on implementing financial accounting standards, requiring banks to adopt a more robust approach to risk management and provisioning

Conclusion

The new regulations are part of the Central Bank’s efforts to implement international best practices in banking regulation and supervision. The regulator has taken a proactive approach to ensure the stability and soundness of Jordan’s banking sector, which will help to maintain public confidence in the financial system and promote economic growth.