Central Bank of Jordan Instructions on Controls for Transactions with Related Parties No. (12/2026)

CENTRAL BANK OF JORDAN
Central Bank of Jordan

Ref: 10 / 1 /
Date: / / 1448 AH
Corresponding: / / 2026 AD

Instructions on Controls for Transactions with Related Parties with the Bank

Based on the provisions of Articles (3/A), (45), (46), (47), and (99/B) of Banking Law No. (28) of 2000 and its amendments, and within the framework of the Central Bank's continued approach to keeping pace with the application of international best banking practices, which aim to enhance the ability of banks to face the risks they are exposed to, and within the framework of implementing the decisions of the Basel Committee on Banking Supervision, it has been decided to issue the Instructions on Controls for Transactions with Related Parties with the Bank, to be applied from 2027/1/1.

Please accept our highest respect,

Governor
Dr. Adel Al-Sharkas

• Attached: A copy of the Instructions on Controls for Transactions with Related Parties with the Bank.
• Attached: Responses to inquiries and comments from banks on the instructions.

Phone: 0096264630301 Email: info@cbj.gov.jo Central Bank of Jordan Fax: 0096264635615 Website: cbj.gov.jo P.O. Box (37) Amman, 11118 Jordan

CENTRAL BANK OF JORDAN
Central Bank of Jordan

Central Bank of Jordan

Instructions
Controls for Transactions with Related Parties with the Bank

No. (12 / 2026)

CENTRAL BANK OF JORDAN
Central Bank of Jordan

Contents

Subject	Page
Introduction	(3)
Article (1): Legal Basis	(3)
Article (2): Scope of Application	(3)
Article (3): Definitions	(3)
Article (4): Provisions and Controls for Transactions with Related Parties	(4)
Article (5): Maximum Limits for Related Party Exposures	(6)
Article (6): Exceptions	(7)
Article (7): Governance of Transactions with Related Parties	(7)
Article (8): General Provisions	(8)
Model Forms	(10)

CENTRAL BANK OF JORDAN
Central Bank of Jordan

Introduction

• The Bank's monitoring of transactions with related parties is considered one of the fundamental elements that contribute to enhancing transparency and integrity in the banking sector and ensuring that Bank decisions are not influenced in favor of related parties or conflicts of interest, through the existence of mechanisms and controls to identify these transactions, monitor them, and limit any risks that may arise from them.
• The monitoring of transactions with related parties with the Bank is based on the principle that such transactions must be based on prioritizing the Bank's interest, and that the related party is not dealt with on better terms than those applied to another person who has no relationship with the Bank. These practices contribute to enhancing the culture of compliance with the highest standards of integrity and transparency, which in turn positively reflects on the Bank's performance, sustainability, strength, and enhances its reputation and relationships with its clients and investors.

Article (1): Legal Basis

• These Instructions are named (Instructions on Controls for Transactions with Related Parties with the Bank), and were issued based on the provisions of Articles (3/A), (45), (46), (47), and (99/B) of Banking Law No. (28) of 2000 and its amendments.

Article (2): Scope of Application

• These Instructions apply to all banks operating in the Kingdom according to the following levels:
  a. Jordan branches. b. Jordan and foreign branches.
  c. Unified.

Article (3): Definitions

• The following words and phrases have the meanings assigned to them below, unless the context or indication implies otherwise:
  a. Credit, Person, Executive, Control, Subsidiary Company, Major Shareholder, according to the meanings assigned to them under the provisions of the currently effective Banking Law.

CENTRAL BANK OF JORDAN
Central Bank of Jordan

b. Senior Executive Management, Body, Board according to the definition provided in the Instructions on Corporate Governance for Banks No. (2023/2) and its amendments.
c. Exposure, Related, Capital Base according to the definition provided in the Instructions on Large Exposure Limits and Credit Granting Controls currently in effect.
d. Affiliate Company: The company in which the Bank holds a share ranging between (20%) and less than (50%) directly or indirectly, and there is no control over its management or general policy, and its financial data is not consolidated with the Bank, in accordance with the relevant accounting standards. e. Related Parties with the Bank include at a minimum the following:

1. The major shareholder in the Bank and its subsidiary companies.
2. The ultimate beneficiary of the shares in the Bank, considering the ultimate beneficiary as the natural person who owns or controls directly or indirectly (5%) or more of the Bank's capital.
3. Subsidiary and affiliate companies of the Bank, (including special purpose entities).
4. Members of the Board of Directors/Executive Body, members of Senior Executive Management, members of the Sharia Supervisory Board in the Bank and in all legal entities mentioned above.
5. Consultants appointed by the Board according to the requirements of Article (5/Z) of the Instructions on Corporate Governance for Banks No. (2023/2) and its amendments.
6. Relatives of the natural persons "mentioned in items (1-5) above" and their spouses, and relatives up to the second degree.
7. The person who has a business interest with the natural persons mentioned in the items above.
8. Any other person whom the Central Bank of Jordan considers to have effective influence (directly or indirectly) on decisions issued by the Bank.

Article (4): Provisions and Controls for Transactions with Related Parties a. The Bank is not allowed to conduct transactions with any of the related parties with the Bank if it can transact on better terms for its benefit with another person who has no relationship with the Bank. These transactions include the following:

1. Exposures {Guaranteed exposures from related parties are considered among exposures towards them}.

CENTRAL BANK OF JORDAN
Central Bank of Jordan

2. Service contracts of all kinds.
3. The Bank's purchase of financial or tangible assets from a related party or selling them to them.
4. Contracting agreements.
5. Rental agreements of all kinds.
6. The Bank borrowing from the related party.
7. Balances/deposits linked at the Bank for the benefit of a related party with the Bank.
8. Write-offs, including claims and transferring exposures off-balance sheet, and any other transactions determined by the Bank.
9. Other transactions that the Central Bank decides to be transactions with related parties for the purposes of these Instructions.
   Existing transactions for any party who became a related party with the Bank are considered among the above transactions.

b. The Bank must, when entering into a transaction with a related party, at a minimum:

1. Evaluate the terms of the transaction in each case the Bank enters into.
2. Evaluate credit risks, financing needs, purpose, duration, repayment schedule, interest rates, commissions, and the nature of guarantees, in a manner consistent with the policies approved by the Board in this regard.
3. Determine interest rates and commissions on deposits.
4. Determine the value and economic viability of any contracts concluded with related parties with the Bank.
5. Re-evaluate/apply the conditions for the items above to previous transactions prior to the date the person became a related party with the Bank.
6. Fully document the process to confirm that the related party with the Bank did not receive preferential terms compared to other customers.

c. Prior approval from the Board of Directors must be obtained when making any decision related to transactions (including exposures) with any related party if the total reaches (500) thousand Dinars or more, and the above limit and specific conditions for transactions must be included in the policy referred to in Article (1/7) of these Instructions. The following are exempt:

CENTRAL BANK OF JORDAN
Central Bank of Jordan

• Exposures between parties of the banking group.
• Employee loans granted as part of the incentive package offered by the Bank to its employees according to a system approved by the Board.

d. An Executive (whether in the Bank or in any of its subsidiary companies) is prohibited from participating in the decision-making process or participating in any meeting where the Bank's transactions with them or their related parties or relatives up to the second degree, or credit granted with their guarantee, are discussed. They are also prohibited from participating in the management of such transactions.

e. Transactions between the banking group must be based on sound principles that consider achieving the Bank's economic interest, while complying with the following as a minimum:

1. Controls for transactions between parties of the banking group, risk management, and the justification for conducting such transactions and their economic benefit to the Bank, and ensuring that no preferential transactions exist.
2. Documenting the entire transaction, indicating its risks and economic benefits, for each transaction separately.
3. Not expanding transactions in the presence of the Bank's presence in countries where there are restrictions and constraints on the movement of funds and continuous changes in their legislative environment or are subject to any type of international sanctions, or are exposed to other risks that affect the Bank's ability to collect its rights from related parties in that country, in addition to the necessity of periodically examining and studying the impact of transactions with these presences on the Bank.
   These conditions and controls must be included in the policy referred to in item (1/7) of these Instructions.

Article (5): Maximum Limits for Related Party Exposures a. The maximum limit for total exposures towards related parties with the Bank must not exceed (25%) of the Bank's capital base for the following levels:

1. Jordan branches.
2. Jordan and foreign branches.
3. Unified.

CENTRAL BANK OF JORDAN
Central Bank of Jordan

b. The maximum limit for credit granted to the Bank's subsidiary company (and any other companies directly or indirectly subsidiary to it) must not exceed (20%) of the subsidiary company's subscribed capital. The Bank is prohibited from guaranteeing any credit granted to these companies by other banks. This limit is exempt for credit granted to leasing companies subsidiary to banks, where the maximum limit for credit granted to these companies is double their subscribed capital.
c. The maximum limit for exposure towards a Board member must not exceed (5%) of the capital base, at the levels specified in item (a) above.
d. The maximum limit for exposures towards a Board member and their related parties, in addition to their spouse, relatives up to the second degree, and associated business interests, and with their guarantee, must not exceed (10%) of the Bank's capital base, at the levels specified in item (a) above.

Article (6): Exceptions

• The following are exempt from Article (5/a):
  a. Loans granted to Bank employees as part of the incentive package offered by the Bank to its employees according to a system approved by the Board. b. Exposures towards the Bank's foreign branches and subsidiary companies operating within and outside the Kingdom, which are consolidated within the unified financial data, provided that full compliance with the principles specified in Article (4/e) is maintained.

Article (7): Governance of Transactions with Related Parties a. The Board must adopt a policy for dealing with related parties with the Bank, which must include at a minimum the following:

1. Mechanisms to identify related parties with the Bank, and transactions with them, including exposures, and the limits of these transactions, and the management of risks that may arise from them.
2. Establishing the necessary regulatory frameworks to ensure compliance with the requirements of these Instructions regarding:

• Managing transactions with related parties and monitoring them continuously.

CENTRAL BANK OF JORDAN
Central Bank of Jordan

• Reporting any deviations from the Bank's internal policies and procedures and the Central Bank of Jordan's instructions in this regard to Senior Executive Management and the Board of Directors if necessary to take appropriate measures in a timely manner.
• Ensuring the Board of Directors is informed of related party transactions periodically.
• Identifying business interests associated with related parties, taking into account the principle of conflict of interest.
• Clearly defining preferential terms.

3. Determining a maximum limit for loans to Senior Executive Management in the Bank.
   b. The Internal Audit Department must conduct an inspection at least once a year to ensure that all transactions conducted with related parties with the Bank were conducted in accordance with effective legislation, the Bank's internal policies, and approved procedures, and to submit its reports and recommendations on this to the Audit Committee. The Audit Committee, which is derived from the Board, must ensure that disclosure of transactions with related parties with the Bank is carried out.

Article (8): General Provisions a. The Bank must provide the Central Bank of Jordan with a quarterly report including the following:

1. Violations of the limits prescribed by these Instructions, including the justifications for the violation and the measures taken by the Bank to correct them.
2. Any receivables on obligations of any related parties or their related parties or those guaranteed by them towards the Bank for a period equal to or exceeding (90) days, with clarification of the measures taken in this regard.
3. The Bank's exposure to losses resulting from any transactions with related parties or their related parties or those guaranteed by them, and clarifying the reasons and measures taken regarding them.
4. Any transaction with related parties with the Bank involving any preferential terms and the justification for that, and the measures taken to correct it.
   b. In the event of a violation of the limits prescribed by these Instructions, the Bank must commit to reducing the value of the violation from the Bank's capital base.

CENTRAL BANK OF JORDAN
Central Bank of Jordan

c. For the purposes of these Instructions, the prescribed limits for exposures are calculated according to the calculation mechanism specified in the Instructions on Large Exposure Limits and Credit Granting Controls currently in effect.
d. The Bank must prepare the necessary forms for identifying related parties with it, enabling it to comply with the requirements of these Instructions, with the possibility of referring to the attached models for this purpose. e. The Central Bank, at its discretion, may issue special orders individually for the Bank or for all banks, including removing any of the Bank's exposures towards related parties from regulatory capital, or requesting certain guarantees for such exposures. f. The Central Bank, at its discretion, may consider certain cases that may not be considered as transactions with related parties with the Bank based on acceptable justifications from its side. g. The Bank must provide the Central Bank with reports related to exposures of related parties with the Bank on a monthly basis, with a maximum deadline of the middle of the following month, according to the forms specified for this purpose. h. For the purposes of these Instructions, Article (11) of the Instructions on Corporate Governance for Banks No. (2023/2) and its amendments is considered an integral part of them, and full compliance with their requirements is mandatory.
i. These Instructions are effective from 2027/1/1, and banks must correct their existing violations of the requirements of these Instructions within a period not exceeding 2027/6/30.

CENTRAL BANK OF JORDAN
Central Bank of Jordan

Appendix
Model Forms

Form One: Disclosure Declaration of Related Parties

Purpose of the Form:
This form is used to provide the Bank with the necessary information and data to determine whether the form submitter or any persons or entities associated with them fall within the definition of a related party according to the effective instructions.

First: Basic Data
Full Name: ______
Job Title: ______
Date of assuming office: ______
Date of filling out the form: ______

Second: Disclosure of the Nature of the Relationship Please specify the nature of the relationship that applies to the submitter:
[ ] Major shareholder or ultimate beneficiary of shares in the Bank.
[ ] Board member.
[ ] Senior Executive Management member.
[ ] Consultant appointed by the Board.
[ ] I hold or have held a position in a subsidiary or affiliate company of the Bank.

Third: Details of Relationship Disclosure
If any of the above cases are selected, please complete the data regarding relatives of the natural persons mentioned above, their spouses, and relatives up to the second degree, and business interests with them:

Name of Person / Entity	Nature of Relationship	Degree of Kinship or Interest

CENTRAL BANK OF JORDAN
Central Bank of Jordan

Fourth: Declaration
I declare and confirm that all information and data contained in this form are correct and complete, and that I have disclosed all relationships and interests that may fall within the definition of a related party according to the effective instructions. I undertake to notify the Bank in writing of any modification or change to this information within a period not exceeding (15) days from the date of occurrence.

Name: ______ Signature: ______ Date: ______

For Internal Bank Use:
The form has been reviewed and all fields have been verified as filled out correctly. It appears that the following parties are related parties with the Bank:

Name of Person / Entity	Nature of Relationship	Degree of Kinship or Interest

Information reviewed by:
Employee: ______ Signature: ______ Notes if any: ______

CENTRAL BANK OF JORDAN
Central Bank of Jordan

Form Two: Annual Declaration of Related Parties

Purpose of the Form:
This form is used to confirm the accuracy of information previously disclosed regarding related parties or to update it in the event of any changes.

First: Basic Data
Full Name: ______
Employee ID: ______
Job Title: ______
Date of filling out the form: ______

Second: Disclosure Status
Please specify the status that applies to the submitter up to the date of filling out the form:
[ ] No changes have occurred to the information or relationships disclosed in the previous form.
[ ] Changes have occurred to the information or relationships disclosed, and they have been updated in this form.
[ ] None of the cases requiring disclosure of related parties apply to me anymore.

Third: Updating Information
If "Changes have occurred" is selected, please provide us with details of the change according to the table below:

Information or Relationship that Changed	Previous Status	Current Status	Date of Change

CENTRAL BANK OF JORDAN
Central Bank of Jordan

Fourth: Declaration
I declare that the information and data contained in this form are correct and complete, and that I have disclosed all information according to the instructions. I undertake to notify the Bank of any changes to the information or relationships disclosed according to the approved mechanism, without waiting for the annual declaration date:

Name: ______ Signature: ______ Date: ______

For Internal Bank Use:
The form has been reviewed and all fields have been verified as filled out correctly. Therefore, signed by:

Employee: ______ Signature: ______ Notes if any: ______

CENTRAL BANK OF JORDAN
Central Bank of Jordan

Form Three: Immediate Disclosure of Any Changes During the Year

Purpose of the Form:
This form is used for immediate disclosure of any changes to the information or relationships related to related parties previously disclosed, or about any new relationship or business interest that may affect the applicability of the definition of a related party.

First: Basic Data
Full Name: ______
Job Title: ______
Date of filling out the form: ______

Second: Nature of the Change
Please specify the change that occurred:
[ ] Acquisition of a status or relationship requiring disclosure as a related party.
[ ] Termination or loss of a status or relationship previously disclosed.
[ ] Modification or change in the information or data previously disclosed.
[ ] Other change that may affect the determination of the related party status, please clarify:

---

Third: Details of the Change

Information Required	Details
Person / Entity Involved
Nature of Relationship or Reason for Disclosure
Details of the Change
Date of Change Occurrence

CENTRAL BANK OF JORDAN
Central Bank of Jordan

Fourth: Declaration
I declare that the information and data contained in this form are correct and complete, and that I have disclosed all relevant information according to the instructions. I undertake to notify the Bank of any changes to the information or relationships disclosed according to the approved mechanism, without waiting for the annual declaration date:

Name: ______ Signature: ______ Date: ______

For Internal Bank Use:
The form has been reviewed and all fields have been verified as filled out correctly. Therefore, signed by:

Employee: ______ Signature: ______ Notes if any: ______