Circular on Preparing a Policy Regulating the Relationship Between the Bank and Investment Account Holders No. 7626/1/10 dated 2013/6/19

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

No.: 7626 / 1/10
Date: 10/8/1434 AH
Corresponding to: 19/6/2013 AD

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Circular to Licensed Islamic Banks

Greetings...

Based on the provisions of Article (4/4) of the Central Bank of Jordan Law No. (23) of 1971 and its amendments, and Article (99/b) of the Banks Law No. (28) of 2000 and its amendments, please work on preparing a policy that regulates the relationship between the bank and investment account holders. This policy must be approved by the bank's Board of Directors after review by the bank's Shariah Supervisory Board and submitted to us within one month from its date. It must include, at a minimum, the following:

• Management/Department: The entity owning the policy.
• Definition of investment accounts.
• The bank's own funds and their components.
• Investment priority / Equality in investment opportunities.
• Bases for profit distribution.
• Expenses charged to investment accounts.
• Expenses charged to shareholders' accounts.
• Profit realization (real or notional tightening).
• Profit accrual.
• Profit distribution (application of the Nemer calculation in profit distribution).
• Bases for managing investment accounts (commingling of funds).
• Exit / Set-off.

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Central Bank of Jordan
CENTRAL BANK OF JORDAN

• Determination of the percentages retained from amounts deposited in investment accounts and the bases followed in their investment.
• The basis followed by the bank regarding shareholders, in their capacity as investors, transferring a portion of their profits to investment account holders.
• Profit rate reserve.
• Investment risk facing fund.
• Loss treatment.
• Zakat.

Please accept our highest respect...

The Governor
Dr. Ziad Friez

Website: www.cbj.gov.jo • E-mail: info@cbj.gov.jo • Fax: 4638889, 4639720, 4639721 • Phone: 4630301 • P.O. Box 37, Amman 11118, Jordan Form (1/1/09) ---