Regulatory Alerts2019-06-11
Added · Updated
Central Bank of Jordan Circular on IFRS 16 Leases and Regulatory Capital
The Central Bank of Jordan mandates that banks operating in the Kingdom include Right of Use Assets in their risk-weighted assets and the denominator of the financial leverage ratio, effective from 1/1/2019. These assets must be assigned a standard risk weight of 100% for capital adequacy calculations. This directive applies to all banks operating in the Kingdom to align with Basel Committee guidelines on IFRS 16 implementation.
In the name of Allah, the Most Gracious, the Most Merciful
[Logo of the Central Bank of Jordan]
Number: 3/10/8271 Date: 7/10/1440 AH Corresponding to: 11/6/2019 AD
Circular to all banks operating in the Kingdom
Greetings,
In light of the actual implementation of International Financial Reporting Standard (IFRS) No. 16 starting from 1/1/2019, and for the purpose of applying regulatory capital instructions in accordance with the guidelines issued by the Basel Committee on Banking Supervision regarding this matter, it is required to include Right of Use Assets within the risk-weighted assets when calculating capital adequacy and within the denominator of the financial leverage ratio, assigning them a standard risk weight of (100%).
Please accept our highest respect,
The Governor Dr. Ziad Fries