Regulatory Alerts2016-10-31
Added · Updated
Central Bank of Jordan Capital Adequacy Instructions No. 2016/67 under Basel III
The Central Bank of Jordan issues Capital Adequacy Instructions No. 2016/67, mandating that all banks in the Kingdom maintain a minimum Common Equity Tier 1 (CET1) ratio of 6%, an Additional Tier 1 (AT1) ratio of 1.5%, and a Tier 2 (T2) ratio of 2%, resulting in a total minimum capital adequacy ratio of 12%. The regulations define strict eligibility criteria for capital instruments, including loss-absorption mechanisms and subordination requirements, while establishing consolidation rules for banking groups and subsidiaries. Specific provisions address the treatment of minority interests, regulatory deductions, and the recognition of surpluses from insurance subsidiaries, with effective application across all banking levels and branches.