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2019-11-01

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Circular on Amendments to Provisions Regarding Non-Compliant Properties and Extension of Credit Classification Instructions

The Central Bank of Jordan amends Circular No. 2510/1/10 to require licensed banks to set aside annual provisions equal to 5% of the total book value of non-compliant seized properties, reaching a cumulative 50% by the end of 2029. The Central Bank also extends the implementation of Circular No. 2009/47 on credit classification and impairment provisions, along with specific items from Circulars 2510/1/10, 11084/1/10, and 16722/1/10, until December 31, 2020. Additionally, the implementation of Circular No. 12001/3/10 remains suspended until December 31, 2020.

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

[Logo of the Central Bank of Jordan] King Abdullah II Award for Government Performance Excellence and Transparency Eighth Cycle (2016-2017) Silver Grade

Reference No.: 1/10/16249 Date: 4/2/1441 AH Corresponding to: 1/11/2019 AD

Circular to All Licensed Banks

Greetings,

Continuing the Central Bank's approach of monitoring and reviewing its issued instructions to make any necessary amendments to serve the national economy and in alignment with international standards and sound banking practices, I have decided the following:

  1. Amend the content of Item (Second) of Central Bank Circular No. (2510/1/10) dated 2017/2/14, such that the required provisions for non-compliant seized properties in violation of Article (48) of Banking Law No. (28) of 2000 and its amendments are completed according to the requirements of that circular at a rate of (5%) annually of the total book values of those properties (regardless of the duration of their non-compliance), effective from the year 2021, so as to reach the required percentage of (50%) for those properties by the end of 2029.

  2. Continue the suspension of the implementation of Central Bank Circular No. (12001/3/10) dated 2009/9/17 until 2020/12/31.

  3. Extend the implementation of the Instructions on Classification of Credit Facilities and Calculation of Impairment Provisions and General Banking Risk Reserves No. (2009/47) dated 2009/12/10 until 2020/12/31.

  4. Extend the implementation of what was stated in Item (First) of Central Bank Circular No. (2510/1/10) dated 2017/2/14 until 2020/12/31.

  5. Extend the implementation of what was stated in Central Bank Circular No. (11084/1/10) dated 2018/8/27 and its subsequent Circular No. (16722/1/10) dated 2018/12/16 until 2020/12/31.

Please accept our highest regards,

The Governor Dr. Ziad Friez

Form (1/10/1-1) P.O. Box 27 • Amman 11118 Jordan • Phone 4630301 • Fax 4638889 • Website: www.cbj.gov.jo • Email: info@cbj.gov.jo

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