Regulatory Alerts2018-07-29
Added · Updated
Circular on Compliance with Fair and Transparent Customer Dealing Instructions in Credit Facility Contracts
The Central Bank of Jordan requires all banks operating in the Kingdom to rectify issues in their credit facility contracts by September 1, 2018. A study revealed contracts containing provisions contradicting Instructions No. 56/2012 on fair and transparent customer dealings. Specific violations include failing to define variable interest rate components, allowing unilateral amendment of rates/fees, exceeding maximum commission limits (e.g., JOD 10 minimum monthly late fee), omitting early repayment terms, using vague fee descriptions, including unclear clauses, using unreadable fonts, authorizing unspecified third parties for debt collection, and requiring customers to waive notification rights. Non-compliance may lead to penalties under relevant banking laws.