Regulatory Alerts2020-09-09
Added · Updated
Circular on Compliance with Audited Financial Data Requirements for Credit Decisions
The Central Bank of Jordan reiterates the obligation for banks to rely on financial data certified by a legal auditor and verified by the Jordan Institute of Certified Public Accountants when making credit decisions. Compliance will be monitored through supervisory inspections that check whether the volume of facilities granted aligns with clients' audited financial statements. Non-compliant banks will be subject to financial penalties and fines under prevailing legislation.
In the Name of Allah, the Most Gracious, the Most Merciful
[Logo of the Central Bank of Jordan]
Number: 1/10/11447 Date: 19/1/1442 AH Corresponding to: 7/9/2020 AD
Circular to Banks Operating in the Kingdom
Greetings,
Further to our Circular No. (1/10/14233) dated 2015/11/18 regarding the necessity for banks to rely on financial data certified by a legal auditor in accordance with standards and reflecting the true financial status of clients when making credit decisions (specifically for clients required to prepare such data in accordance with prevailing legislation), and our Circular No. (1/10/1271) dated 2016/1/25 regarding the necessity for banks to obtain verification from the Jordan Institute of Certified Public Accountants on the authenticity of the legal auditor's signature on clients' financial statements.
I reiterate the necessity for full compliance with the aforementioned circulars. Compliance by the bank will be verified through supervisory inspections by checking the extent to which the volume of actual activity and the volume of facilities granted to clients align with what is reflected in their audited financial statements. In this regard, we note that financial penalties and/or fines will be imposed on non-compliant banks in accordance with the provisions of prevailing legislation.
Please accept our highest respect,
The Governor Dr. Ziad Faris
- Copy to: The Honorable Jordan Institute of Certified Public Accountants
- P.O. Box (927267) Amman (11190) Jordan