Central Bank of Jordan Minimum Capital Requirements for Banks Operating in Jordan Circular No. 7/2003

Central Bank of Jordan
CENTRAL BANK OF JORDAN

Number: 10/4386
Date: 25/1424 AH
Approval: 20/7/2003 AD

Minimum Capital Requirements for Banks Operating in Jordan Circular No. (7/2003) Issued by the Central Bank of Jordan

Based on the Central Bank's commitment to strengthening the financial solvency of banks, ensuring their ability to continue operating effectively, and meeting upcoming obligations, and in accordance with the provisions of Article (8) of Banking Law No. (28) of 2000, the following is approved:

First: Minimum Paid-up Capital:
a- The minimum paid-up capital for Jordanian banks is 40 million Jordanian Dinars, and banks with capital below this limit must work to reach it before December 31, 2007. b- For the purpose of increasing capital, banks may, as one of the accepted options, capitalize reserves and retained earnings available for distribution in accordance with applicable laws and regulations, subject to the prior approval of the Central Bank.

c- Banks subject to the provisions of these instructions must provide the Central Bank, before the end of this year, with a preliminary proposal for the mechanism suggested for increasing capital and the expected date for achieving this. d- The capital of licensed foreign bank branches operating in the Kingdom shall remain at the levels previously approved. As for banks applying for a license, the required capital shall be determined based on Article (12/a) of the Banking Law.

Second: Subject to the provisions of First above, the minimum shareholders' equity to total assets ratio (Leverage Ratio) is 6%, and banks with a ratio below this limit must submit a plan to increase capital to the Central Bank before the end of the current year.

Third: In all cases, it must be ensured that the capital adequacy ratio does not fall below the minimum level determined by the Central Bank.

Governor
Dr. Amneh Touqan