Instructions for Licensed Exchange Companies Obtaining Loans from Partners or Credit from Licensed Banks

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

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Number: 17/3/9/1634 Date: 21/11/1440 AH Corresponding to 24/7/2019 AD

Circular to Licensed Exchange Companies

Subject: Instructions for Licensed Exchange Companies Obtaining Loans from Partners in the Company / Credit from Licensed Banks in the Kingdom

Greetings,

Based on the provisions of Articles (12/b) and (19/a) of the Exchange Business Law No. (44) of 2015, we enclose herewith the Instructions for Licensed Exchange Companies Obtaining Loans from Partners in the Company / Credit from Licensed Banks in the Kingdom, issued pursuant to the Board of Directors' Decision No. (172/2019) dated 4/7/2019.

Please accept our highest regards,

Governor Dr. Ziad Faris

Number of Attachments: (2)

P.O. Box 37, Amman 11118 - Jordan. Tel: 9/4630301 * Fax: 4638889, 4639730. Website: www.cbj.gov.jo. Email: info@cbj.gov.jo

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[Logo of the Central Bank of Jordan]

Instructions for Licensed Exchange Companies Obtaining Loans from Partners in the Company / Credit from Licensed Banks in the Kingdom, issued pursuant to the Board of Directors' Decision No. (172/2019) dated 4/7/2019, based on the provisions of Articles (12/b) and (19/a) of the Exchange Business Law No. (44) of 2015.

Article (1): An exchange company wishing to obtain a loan from partners in the company / credit from licensed banks in the Kingdom must submit an application for approval from the Central Bank on the form prepared for this purpose. The application must be signed by the authorized signatories of the company and stamped with the company's official seal.

Article (2): The exchange company must attach to its application referred to in Article (1) above a financial statement reflecting the company's actual financial status as of the date of the application, certified by an external auditor.

Article (3): When studying the exchange company's application submitted to obtain Central Bank approval for obtaining a loan from partners in the company / credit from licensed banks in the Kingdom, the following shall be considered: a- At least two years must have passed since it commenced its work. b- The extent of the exchange company's compliance with the provisions of all effective legislation in the Kingdom, particularly the Exchange Business Law and the effective instructions combating money laundering and financing of terrorism specific to exchange companies. c- At least one year must have passed since the date the company repaid the last loan granted to it from partners in the company / from licensed banks in the Kingdom.

Article (4): The following conditions must be met for the loan from partners in the company / credit from licensed banks in the Kingdom to be obtained: a- The credit from licensed banks in the Kingdom must be in the name of the exchange company and not in the name of its partners. b- The loan from partners in the company / credit from licensed banks in the Kingdom must be used in its operational activities, and the Central Bank must be provided with the company's repayment plan. c- The total balance of the loan from partners in the company / credit granted from licensed banks in the Kingdom and its interest shall not exceed (50%) of the company's paid-up capital at any time, and the interest on the loan granted from partners in the company shall not exceed the prevailing interest rate on the date the loan was granted. d- The repayment period for the loan from partners in the company / credit granted from licensed banks in the Kingdom shall not exceed two years. The company may request an extension of the repayment period for the entire loan/credit amount or part thereof, provided that the total period from the start of granting the loan/credit until repayment does not exceed (3) years.

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e- The shares of partners in the capital of the exchange company shall not be pledged for the purpose of obtaining credit from licensed banks in the Kingdom. Nor shall any of the company's assets be pledged except for the purpose of obtaining credit related to financial guarantees specified in accordance with the provisions of Article (5/b) of the Law or with the prior approval of the Central Bank, as a guarantee against credit granted for the purpose of purchasing a fixed asset for the company's operational use exclusively. In all cases, the company must inform the Central Bank of the nature of the guarantee provided to obtain the credit.

Article (5): Subject to the provisions of Articles (1), (2), and (3) of these Instructions, the company wishing to obtain a supporting loan from partners in the company must attach to the application submitted for Central Bank approval the following: a- A feasibility study demonstrating the expected financial impact of the supporting loan on the company's business. b- The company's plan for repaying the supporting loan, with repayment to begin after two years from the date of obtaining it.

Article (6): The following conditions must be met for the supporting loan from partners in the company to be obtained: a- The supporting loan from partners in the company must be used to support the company's capital and its operational activities, and this loan must be interest-free. b- The amount of the supporting loan from partners in the company shall not exceed (100%) of the company's paid-up capital at any time, and under no circumstances shall any of the company's assets be pledged as security for this loan. c- The maturity period for repayment of the supporting loan from partners in the company shall not be less than five years, and this loan shall not be repayable early before the original maturity date, whether in a lump sum for the entire loan amount or part thereof. d- The company may, after notifying the Central Bank, cover the entire loss incurred at the end of the financial period or part thereof, by reducing the balance of the existing supporting loan from partners in the company, and only once, provided that there are no retained earnings in the company's accounts at that time from previous/current financial periods. e- The agreement concluded between the company and its partners, the providers of the supporting loan, must include clauses that take into account the above conditions. f- The number of times the company obtains a supporting loan from partners in the company shall not exceed two times at most during the company's lifetime.

Article (7): An exchange company whose application for obtaining a loan/supporting loan from partners in the company / direct credit from licensed banks in the Kingdom is approved must provide the Central Bank of Jordan with the following:

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a- A copy of the agreement concluded between the company and the partners in the company / licensed banks in the Kingdom, showing the terms of granting the loan/credit. b- The amount of the outstanding loan/supporting loan/credit balance and evidence that the company has repaid the amounts due on the due date in due course, along with a statement of transactions made on the loan/supporting loan granted from partners in the company / credit granted from licensed banks in the Kingdom, on a semi-annual basis. This statement must reach us no later than the tenth day of the month following the period for which this statement is prepared. It must be certified by the company's external auditor if the loan was granted from partners in the company.

Article (8): These Instructions do not apply to credit that must be provided in favor of one of the official entities in the Kingdom, and we must be provided with full details regarding it.

Article (9): The exchange company must include detailed explanations regarding the outstanding balance of the loan/supporting loan from partners in the company / credit granted from licensed banks in the Kingdom within the explanations related to the company's final financial data. These explanations must include, at a minimum, the ceiling of the loan/supporting loan/credit granted, its duration, the outstanding balance, payment amounts, and repayment mechanism, interest rate, commission rate and amount, and the remaining period until the due date, where applicable.

Article (10): Meeting the conditions and requirements for obtaining a loan/supporting loan from partners in the company / credit from licensed banks in the Kingdom above is the basis for considering the exchange company's application submitted in this regard and does not necessarily imply automatic approval by the Central Bank.

Article (11): An exchange company is not allowed to provide loans or any type of credit, including guaranteeing others.

Article (12): These Instructions shall come into effect from their date, and the Instructions for Licensed Exchange Companies Obtaining Loans / Credit Facilities No. (2011/1), issued pursuant to the Board of Directors' Decision No. (48/2011) dated 28/4/2011, based on the provisions of Articles (14/b) and (15/a) of the Exchange Business Law No. (26) of 1992, amended by the Board of Directors' Decision No. (88/2012) dated 19/7/2012, are hereby repealed.

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

[Logo of the Central Bank of Jordan]

Central Bank of Jordan Exchange Business Supervision Department P.O. Box (37) / Amman

Form ( )

Application for Approval for an Exchange Company to Borrow from Partners in the Company / Credit from Licensed Banks in the Kingdom

Application Date: - .................................... Company Name: - .................................... We request approval for the company to borrow from partners in the company / credit from licensed banks in the Kingdom according to the data provided below:

Amount of Loan/Credit Requested: ( ....... ) Jordanian Dinar Source of Obtaining Loan/Credit: [ ] Loan from Partners in the Company [ ] Supporting Loan from Partners in the Company. [ ] Credit from Licensed Banks in the Kingdom

Annual Interest Rate on Loan/Credit: ( ...... %) Commission Paid and its Rate: .................................................................... Duration of Loan/Credit: ( ..... ) year, ( ..... ) month Repayment Method: [ ] Lump sum at the end of the period. [ ] In monthly installments, value of each installment (........) Jordanian Dinar. [ ] In installments ............. value of each installment (........) Jordanian Dinar.

Purpose of Borrowing/Credit:

1. ....................................................................
2. ....................................................................

Amount of Guarantees (if any): ( .................... ) Jordanian Dinar Source of Guarantees (if any): .................................................................... Date of Obtaining Last Loan/Credit (if any): .................................................................... Date of Repayment of Last Installment for Last Loan/Credit (if any): ....................................................................

• We commit to providing the Central Bank with any data related to the above loan/credit upon request.

Name and Signature of the Authorized Signatory for the Company Company Stamp