Central Bank of Jordan Circular on Housing Credit Reserve Relief under the Karim Housing Initiative

In the Name of Allah, the Most Gracious, the Most Merciful

[Logo of the Central Bank of Jordan]

Reference No.: 5159/10
Date: 19/5/1431 AH
Corresponding to: 4/5/2010 AD

Circular to all Licensed Banks

Greetings,

Based on the provisions of Article (44/A) of the Central Bank Law No. (23) of 1971 and its amendments, and subsequently the Mandatory Cash Reserve Instructions No. (19/2004) dated 25/7/2004 and our Circular No. (5654/2/2/10) dated 16/4/2009, and in order to activate the High Royal Initiative (Karim Housing for a Dignified Life), the following is decided:

First: An amount equal to (200%) of the outstanding balances of direct credit facilities granted in Jordanian Dinar for residential purposes for individuals (exclusively within the Karim Housing for a Dignified Life initiative) shall be released from the Mandatory Cash Reserve in Jordanian Dinar, provided that all the following conditions are met:

1. That the interest or returns for Islamic banks, and commissions of any kind collected on these facilities, do not exceed (5%) throughout the duration of the facilities.
2. That these facilities are not used to settle existing facilities with the same bank or any other banks, except for facilities previously granted under the Karim Housing for a Dignified Life initiative before the date of this circular.
3. That the granting of these facilities does not cause the bank to violate the provisions of the Banks Law and the instructions issued pursuant thereto.

Second: This circular applies to the credit facilities referred to in the First item above that are granted from its date until the end of December 2011, whereby the aforementioned percentage is released from the Mandatory Cash Reserve in Jordanian Dinar throughout the duration of the facilities. This release ceases when the reserve amount reaches the legal minimum of the reserve base.

P.O. Box 47, Amman 11118, Jordan ● Phone: 4630301 ● Fax: 4638889, 4639731, 4639731 ● E-mail: info@cbj.gov.jo ● www.cbj.gov.jo

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Third: Provide the Central Bank with monthly data regarding the facilities referred to in the First item above according to the attached form, to be submitted along with the Mandatory Cash Reserve statements required pursuant to our Instructions No. (19/2004) dated 25/7/2004.

Fourth: The bank is responsible for the correctness and accuracy of the data contained in the attached form, and for ensuring that these facilities are granted exclusively to finance the purpose mentioned in the First item, under the threat of applying the provisions of Article (88/B) of the Banks Law No. (28) of 2000 and its amendments.

Please accept our highest respect,

The Governor
Dr. Amieh Salah Touqan

• Attached.

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Form (1)

Jordanian Dinar Facilities Granted for Residential Purposes for Individuals (within the Karim Housing for a Dignified Life Initiative) during the month of

Client Name	Outstanding Facility Balance	Grant Date	Maturity Date	Interest Rate (for Banks)	Commissions	Interest Rate (for Islamic Banks)
Total

• Total outstanding balance of facilities granted for residential purposes for individuals (within the Karim Housing for a Dignified Life Initiative) as of the end of the month of ( ) in Jordanian Dinar.

Bank Stamp and Authorized Signatures