Rule · CBJ · 9 Jun 2016

Circular Regarding Personal Loans for Real Estate Refinancing No. (7981/4/2/10) dated 2016/6/9

The Central Bank of Jordan clarifies that personal loans for real estate refinancing involve banks granting funds in exchange for clients pledging existing property as collateral. For customers classified under retail definitions, the maximum tenure for such loans is capped at eight years. The circular explicitly states that this prohibition does not apply to banks purchasing residential mortgages from other banks.

JordanCentral Bank of Jordan

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

Number: 7981 / 10 / 2 / 4
Date: 4/5/1437 AH
Signed: 9/7/2016 AD

Circular to Banks Operating in the Kingdom

Greetings,

Further to our Circular No. (7293/4/2/10) dated 24/5/2016, please clarify the following:

1- The meaning of the personal loan for real estate refinancing / home improvement loan is "banks granting their customers personal loans in exchange for the customer (Equity Release) pledging an existing property for the benefit of the bank."

2- If any bank grants a customer a loan under the above product, and the retail definition applies to the customer, the age of the loan must not exceed eight years.

3- The prohibition does not include banks repurchasing real estate/residential loans from other banks.

Please accept our highest respect,

Governor
Dr. Ziad Frieze

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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Amends

Circular Regarding Personal Loans for Real Estate Refinancing No. (7293/4/2/10) dated 2016/5/242016 · CBJ
“Further to our Circular No. (7293/4/2/10) dated 24/5/2016, please clarify the following:”

Timeline

This document amends: Circular Regarding Personal Loans for Real Estate Refinancing No. (7293/4/2/10) dated 2016/5/24