Regulatory Alerts2025-10-08
Added · Updated
Instructions for Classification and Treatment of Ijarah Muntahia Bittamleek at Licensed Islamic Banks No. 13/2025
The Central Bank of Jordan mandates specific impairment provisioning and classification rules for Ijarah Muntahia Bittamleek receivables at licensed Islamic banks, requiring 50% provisions for defaults of 30-89 days and 100% for defaults of 90 days or more. The directive prohibits increasing existing exposures for customers with non-performing Ijarah receivables and forbids settling such debts by arranging new Ijarah contracts with related parties. It also establishes a mandatory six-month testing period before reclassifying modified non-performing exposures and requires quarterly data reporting to the Central Bank. These instructions repeal the 2014 version and become effective on December 1, 2025.
Topics
islamic-finance
credit
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