Regulatory Alerts2020-03-15
Added · Updated
Central Bank of Jordan Circular on Amendments to the Medium-Term Lending Program for Licensed Banks
The Central Bank of Jordan amends the Medium-Term Lending Program for Licensed Banks by reducing interest rates to 1.00% for projects in the Capital Governorate and 0.5% for other governorates, requiring banks to apply these reduced rates to existing loans effective immediately. The circular extends the loan tenor for all targeted sectors in the Capital to 10 years, including a two-year grace period, and raises the general loan ceiling to 3 million Dinars while maintaining 4 million Dinars for renewable energy and transport sectors. Additionally, the export sector is included in the program, and these changes are effective from the date of the circular, 15 March 2020.
In the Name of Allah, the Most Gracious, the Most Merciful
[Logo of the Central Bank of Jordan]
Reference No.: 6/3/4376 Date: 20 Rajab, 1441 AH Corresponding to: 15 March, 2020 AD
Circular to All Licensed Banks
Subsequent to the Instructions regarding the Central Bank's program for financing and supporting economic sectors (Medium-Term Loans for Licensed Banks) No. (2011/54) dated 14 March 2011 and subsequent circulars thereto, and in pursuit of the Central Bank's efforts to enhance the performance of vital economic sectors, including small, medium, and emerging enterprises, the Central Bank has decided to implement the following amendments to the program instructions:
First: Reduction of the program's interest rates to become 1.00% instead of 1.75% for projects within the Capital Governorate and 0.5% instead of 1.0% for projects in other governorates.
Second: Banks are required to reduce interest rates by the same percentage on currently existing loans effective from this date.
Third: Extension of the tenor available for loans and for all targeted sectors in the program within the Capital to unify it with other governorates, becoming 10 years, including a two-year grace period for those who wish.
Fourth: Raising the loan ceiling for all sectors to become 3 million Dinars, while maintaining the ceiling for the renewable energy and transport sectors at 4 million Dinars.
Fifth: Inclusion of the export sector within the program.
This decision is effective from this date.
Governor Dr. Ziad Fariz