Regulatory Alerts2021-03-24
Added · Updated
Central Bank of Jordan Circular on Checkbook Issuance Guidelines
The Central Bank of Jordan mandates that licensed banks align checkbook issuance with customer transaction volumes, account balances, and credibility. Banks are prohibited from issuing checkbooks shortly after account opening or for personal use without justification, and must verify that check usage corresponds to genuine commercial transactions. Additionally, banks must implement automated anti-money laundering scenarios to monitor check movements and ensure internal supervision of the issuance process.
In the Name of Allah, the Most Gracious, the Most Merciful
[Logo of the Central Bank of Jordan]
Reference No.: 10/1/5124 Date: 10/8/1442 AH Corresponding to: 24/3/2021 AD
Circular to All Licensed Banks
Greetings,
Subsequent to the instructions of the Returned Checks Unit No. (55/2011) dated 2011/10/24 and subsequent circulars regarding the necessity of aligning the size of the checkbook issued to the customer with the volume of their financial transactions, their balances at the bank, and the credibility of their dealings in general, in accordance with Article No. (12) of the aforementioned instructions, I emphasize the necessity of full compliance with the content of the aforementioned instructions and the need to give due importance to the following points regarding the process of issuing checkbooks to customers:
-
Consideration of aligning the size of the checkbook issued to the customer with the volume of their financial transactions and their balances at the bank.
-
Consideration of not issuing checkbooks within a short period from the date of account opening at the bank, except in the narrowest limits and based on a deep study regarding this matter, which includes assessing the customer's suitability before issuing a checkbook.
-
Not issuing checkbooks without justification or for customers whose nature of dealings or volume of cash flows for the account does not warrant issuing them checkbooks, and considering not issuing checkbooks to customers for personal purposes (or to the minimum extent) and restricting them to commercial activities, and the necessity of verifying how and to what extent checkbooks are utilized and whether there are genuine sales transactions corresponding to them.
-
Not issuing checkbooks to customers in large numbers within a short period of time or issuing more than one checkbook at the same time before ensuring that previous checkbooks have been fully utilized.
-
The necessity of having supervision within the bank to monitor and follow up on the process of issuing checkbooks.
-
The necessity of having scenarios in the automated systems used by the bank in the field of anti-money laundering and counter-terrorism financing to monitor the movement and circulation of checks and detect any movements that do not match the customer's profile or the declared annual income or the nature of the customer's activity.
The bank must take the necessary measures to address any weaknesses related to the process of issuing and following up on checks, noting that the Central Bank will take the necessary measures to ensure your compliance with our instructions in this regard.
Please accept the highest regards,
Governor Dr. Ziad Frieze
Form (1/1/09)