RegAlert2016-06-20
Added · Updated
Circular Regarding Early Repayment on (Discounted Loans and Advances) Product No. 8352/4/2/10 dated 2016/6/20
Banks operating in Jordan must refund prepaid, unearned interest on discounted loans and advances when customers make early repayments, calculated from the early repayment date to the original maturity date. Banks are permitted to charge an early repayment commission, but this fee is capped at 1% of the outstanding balance. This requirement applies to all banks under the Central Bank of Jordan's supervision and takes effect immediately upon the circular's issuance.
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In the Name of Allah, the Most Gracious, the Most Merciful
Number: 8252/4/2/10
Date: 15/9/1437 AH
Corresponding: 2016/6/20 AD
Circular to Banks Operating in the Kingdom
Greetings,
In light of the numerous complaints received by the Central Bank regarding the subject of "Early Repayment," particularly concerning the product "Discounted Loans and Advances," under which banks recognize all interest revenues as collected interest in advance at the time of disbursement.
We emphasize the necessity for you to refund the value of prepaid (collected in advance) and unearned interest on customer loans and advances for those wishing to make early repayments, from the date of early repayment until the original repayment date, with the possibility of collecting an early repayment commission not exceeding (1%), effective from this date.
Please accept our highest regards,
The Governor
Dr. Ziad Friez
P.O. Box 27 • Amman 11118 Jordan • Phone 02013646 • Fax 02988364 • 02683646 Website: www.cbj.gov.jo • Email: info@cbj.gov.jo
(117-1/2/10) Reviewed
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Source: Central Bank of Jordan — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works