Instructions for Classification of Credit Exposures and Calculation of Impairment Provisions No. (8/2024)

The Central Bank of Jordan issued new instructions, effective January 1, 2025, for all banks operating in the Kingdom, branches of Jordanian banks, and subsidiary banking companies operating abroad. These instructions define three categories for credit exposures: Acceptable Risk (Performing), Under Monitoring (Performing), and Non-Performing, with specific criteria for each, including overdue periods (e.g., 30-89 days for Under Monitoring, 90+ days for Non-Performing) and overdraft limits. They also detail conditions for restructuring and rescheduling, setting maximum grace periods of 18 months for restructuring and 12 months for rescheduling, and limiting repayment periods for restructured/rescheduled corporate exposures to 10 years. Furthermore, the instructions mandate specific impairment provision percentages for non-performing exposures (25% for substandard, 50% for doubtful, 100% for loss) and 5% for under monitoring exposures, with provisions for collateralized exposures and those guaranteed by the Jordanian Loan Guarantee Company.