Regulatory Alerts2022-04-29
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Capital Adequacy Instructions According to Revised Standard No. 15 Issued by the Islamic Financial Services Board
The Central Bank of Jordan issued Circular No. 72/2018 to implement the Islamic Financial Services Board's Revised Standard No. 15 for Islamic banks. The directive mandates that banks submit capital adequacy ratio calculations starting from the first quarter of 2018, with quarterly consolidated and semi-annual all-level reports due by the 15th of the following month. Banks must also provide specific forms based on their December 31, 2017 financial position within one month and obtain prior Central Bank approval before listing new Tier 1 or Tier 2 capital instruments. This circular repeals previous instructions and circulars dated 2010, 2003, and 2013.
No.: 10/1/1765 Date: 18/5/1439 Hijri Corresponding to: 4/2/2018 Regulatory Capital Instructions According to the Revised Standard no. (15) issued by the Islamic Financial Services Board (IFSB) no. (72/2018) Issued by the Central Bank of Jordan based on the provisions of Article (99/b) of the Banking Law No. (28) for the year 2000 and its amendments After Greetings, In accordance with the provisions of Article (36/a) of the Banking Law, a CD is attached hereto that includes Capital Adequacy Instructions According to the Revised Standard no. (15) issued by the Islamic Financial Services Board. In this regard, the following has been decided:
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Each of the Islamic banks must provide the Central Bank with forms of the capital adequacy ratio calculating in accordance with these instructions, starting from the data of the first quarter of 2018. So that its quarterly at the consolidated level and semi-annual at all levels. Provided that we receive the forms no later than the fifteenth of the month following the date of such data, and one month after the date of the first data to be provided to us in accordance with the instructions.
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Provide the Central Bank, within a month from its date, with forms of the capital adequacy ratio calculating at all levels in accordance with these instructions depends on the bank’s financial position as of 31/12/2017, with the aim of studying the impact of applying these instructions on the solvency ratios of banks.
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Obtaining the prior approval of the Central Bank before the bank lists any new financial instruments within Tier 1 or Tier 2 Capital.
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These instructions shall come into force as of the data of the first quarter of 2018, and the following instructions and circulars shall be cancelled:
- Regulatory capital adequacy instructions no. (50/2010) dated 19/8/2010.
- Circular no. (10/1/12905) dated 2/9/2003.
- Circular No. (10/5/928) dated 27/1/2013. Respectfully, Governor Dr. Ziad Fariz