Regulatory Alerts2025-11-04
Added · Updated
Instructions for the Internal Capital Adequacy Assessment Process (ICAAP) No. (4/2025)
These instructions for the Internal Capital Adequacy Assessment Process (ICAAP) become effective on January 1, 2026, applying to all banks operating in the Kingdom, including Jordanian banks and foreign bank branches. Banks are required to implement sound procedures for assessing and maintaining capital, submit annual ICAAP results by the end of April, and ensure the process is integrated with risk management and strategic decision-making. The Central Bank will conduct a Supervisory Review Process (SRP) to evaluate banks' capital adequacy, with powers to impose additional capital requirements or corrective actions if necessary. The instructions mandate the identification and measurement of both Pillar 1 and Pillar 2 risks, requiring capital allocation or documented justification for risks deemed material, with quarterly reports to management.
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