Instructions on Controls for Transactions with Related Parties to the Bank No. (12/2026)

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

الرقم: ١٠ / ١ / ١٧٤٠
التاريخ: ٦ / ٤ / ١٤٤٨هـ
الموافق: ٨ / ١٠ / ٢٠٢٦م

Instructions on Controls for Transactions with Related Parties to the Bank

Based on the provisions of Articles (3/A), (45), (46), (47), and (99/B) of Banking Law No. (28) of 2000 and its amendments, and in the context of the Central Bank's continued pursuit of keeping pace with the application of best banking practices, which aim to enhance banks' ability to face the risks they are exposed to, and within the framework of applying the decisions of the Basel Committee on Banking Supervision, it has been decided to issue the Instructions on Controls for Transactions with Related Parties to the Bank, and these shall be applied as of 2027/1/1.

Please accept our highest regards,

The Governor
Dr. Adel Al-Sharkas

• Attached is a copy of the Instructions on Controls for Transactions with Related Parties to the Bank.
• Attached are the responses to banks' inquiries and comments on the instructions.

Phone 0096264630301
Fax 0096264635615
Central Bank of Jordan
P.O. Box (37) Amman, 11118 Jordan
Email info@cbj.gov.jo
Website cbj.gov.jo

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

البنك المركزي الأردني

Instructions
Controls for Transactions with Related Parties to the Bank No. (12/2026)

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

Contents

Subject	Page
Introduction	(3)
Article (1): Legal Basis	(3)
Article (2): Scope of Application	(3)
Article (3): Definitions	(3)
Article (4): Provisions and Controls for Transactions with Related Parties	(4)
Article (5): Maximum Limits for Related Party Exposures	(6)
Article (6): Exceptions	(7)
Article (7): Governance of Transactions with Related Parties	(7)
Article (8): General Provisions	(8)
Model Forms	(10)

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

Introduction

• The Bank's supervision of transactions with related parties is considered one of the fundamental elements that contribute to enhancing transparency and integrity in the banking sector and ensuring avoiding influencing the Bank's decisions in favor of related parties and conflicts of interest, through the existence of mechanisms and controls to identify these transactions, monitor them, and limit any risks that may arise from them.
• The supervision of transactions with related parties to the Bank is based on the principle that such transactions must be based on prioritizing the Bank's interest, such that the Bank does not deal with a related party on better terms than those offered to another person who has no relationship with the Bank. These practices contribute to enhancing the culture of compliance with the highest standards of integrity and transparency, which in turn positively reflects on the Bank's performance, sustainability, and strength, and enhances its reputation and relationships with its clients and investors.

Article (1): Legal Basis

• These Instructions are named (Instructions on Controls for Transactions with Related Parties to the Bank) and were issued based on the provisions of Articles (3/A), (45), (46), (47), and (99/B) of Banking Law No. (28) of 2000 and its amendments.

Article (2): Scope of Application

• These Instructions apply to all banks operating in the Kingdom according to the following levels:
  a. Jordan branches. b. Jordan and foreign branches.
  c. Unified.

Article (3): Definitions

• The following words and phrases have the meanings specified below unless the context or circumstances indicate otherwise:
  a. Credit, Person, Executive, Control, Subsidiary Company, Major Shareholder, according to the meanings specified under the provisions of the effective Banking Law.

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

b. Senior Executive Management, Body, Council, according to the definition provided in the Instructions on Corporate Governance for Banks No. (2/2023) and its amendments.
c. Exposure, Related, Capital Base, according to the definition provided in the effective Instructions on Large Exposure Limits and Credit Granting Controls.
d. Affiliate Company: The company in which the Bank holds a share ranging between (20%) and less than (50%) directly or indirectly, with no control over its management or general policy, and its financial statements are not consolidated with the Bank, in accordance with the relevant accounting standards. e. Related Parties to the Bank include at a minimum the following:

1. The major shareholder in the Bank and its subsidiary companies.
2. The ultimate beneficiary of the shares in the Bank, considering the ultimate beneficiary as the natural person who owns or controls directly or indirectly (5%) or more of the Bank's capital.
3. Subsidiary and affiliate companies of the Bank, (including special purpose entities).
4. Members of the Board of Directors/Executive Body, members of Senior Executive Management, members of the Sharia Supervisory Board in the Bank, and all legal persons mentioned above.
5. Consultants appointed by the Council according to the requirements of Article (5/Z) of the Instructions on Corporate Governance for Banks No. (2/2023) and its amendments.
6. Relatives of the natural persons "mentioned in items (1-5) above" and their spouses, and relatives up to the second degree.
7. A person who has a business interest with the natural persons mentioned in the items above.
8. Any other person whom the Central Bank of Jordan considers to have effective influence (directly or indirectly) on decisions issued by the Bank.

Article (4): Provisions and Controls for Transactions with Related Parties a. The Bank is not permitted to conduct transactions with any of the related parties to the Bank if it can deal on better terms for its benefit with another person who has no relationship with the Bank. These transactions include the following:

1. Exposures (guaranteed exposures from related parties are considered among exposures towards them).

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

2. Service contracts of all types.
3. The Bank's purchase of financial or tangible assets from a related party or selling them to them.
4. Contracting agreements.
5. Rental agreements of all types.
6. The Bank borrowing from the related party.
7. Deposits/funds tied at the Bank in favor of a related party.
8. Write-off, including claims and transferring exposures off-balance sheet, and any other transactions determined by the Bank.
9. Other transactions that the Central Bank decides to be transactions with related parties for the purposes of these Instructions.
   Existing transactions for any party that became a related party to the Bank are considered among the above transactions.

b. The Bank must, when entering into a transaction with a related party, at a minimum:

1. Evaluate the terms of the transaction in each case the Bank enters into.
2. Evaluate credit risks and financing needs, purpose, duration, repayment schedule, interest rates, commissions, and nature of guarantees, in a manner consistent with the policies approved by the Council in this regard.
3. Determine interest rates and commissions on deposits.
4. Determine the value and economic viability of any contracts concluded with related parties.
5. Re-evaluate the application of the conditions for the items above to previous transactions as of the date the person became a related party to the Bank.
6. Document the entire process to confirm that the related party did not receive preferential terms compared to other customers.

c. Prior approval from the Board of Directors must be obtained when making any decision related to transactions (including exposures) with any related party if the total amount reaches (500) thousand Dinars or more, and the above limit and specific conditions for transactions must be included in the policy referred to in Article (7/A) of these Instructions. The following are exempt:

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

• Exposures between members of the banking group.
• Employee loans granted as part of the incentive package offered by the Bank to its employees according to a system approved by the Council.

d. The Executive (whether in the Bank or in any of its subsidiary companies) is prohibited from participating in the decision-making process or participating in any meeting discussing the Bank's transactions with them or their related parties or relatives up to the second degree, or credit granted with their guarantee. They are also prohibited from participating in the management of these transactions.

e. Transactions within the banking group must be based on sound principles that consider achieving the Bank's economic interest, while adhering to the following as a minimum:

1. Controls on transactions between members of the banking group, risk management, and the justification for conducting these transactions and their economic benefit to the Bank, ensuring no preferential transactions exist.
2. Documenting the entire transaction, detailing its risks and economic benefits, for each transaction separately.
3. Not expanding transactions with the Bank's presence in countries where there are restrictions on capital movements and continuous changes in their legislative environment, or subject to any type of international sanctions, or exposed to them in that country, in addition to the necessity of periodically examining and studying the impact of transactions with these presences on the Bank.
   These conditions and controls must be included in the policy referred to in item (7/A) of these Instructions.

Article (5): Maximum Limits for Related Party Exposures

a. The maximum limit for total exposures towards related parties to the Bank must not exceed (25%) of the Bank's capital base for the following levels:

1. Jordan branches.
2. Jordan and foreign branches.
3. Unified.

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

b. The maximum limit for credit granted to the Bank's subsidiary company (and any other companies directly or indirectly owned by it) must not exceed (20%) of the subsidiary company's subscribed capital. The Bank is prohibited from guaranteeing any credit granted to these companies by other banks. This limit is exempt for credit granted to the Bank's subsidiary finance leasing companies, where the maximum limit for credit granted to these companies is twice their subscribed capital.
c. The maximum limit for exposure towards a Council member must not exceed (5%) of the capital base, at the levels specified in item (a) above.
d. The maximum limit for exposures towards a Council member and their related parties, in addition to their spouse, relatives up to the second degree, and business interests associated with them, and with their guarantee, must not exceed (10%) of the Bank's capital base, at the levels specified in item (a) above.

Article (6): Exceptions

• The following are exempt from Article (5/A):
  a. Loans granted to Bank employees as part of the incentive package offered by the Bank to its employees according to a system approved by the Council. b. Exposures towards the Bank's foreign branches and subsidiary companies operating within and outside the Kingdom, which are consolidated within the consolidated financial statements, provided that full compliance with the principles specified in Article (4/E) is maintained.

Article (7): Governance of Transactions with Related Parties

a. The Council must adopt a policy for dealing with related parties to the Bank, which must include at a minimum:

1. Mechanisms to identify related parties to the Bank, transactions with them, including exposures, limits of these transactions, and risk management that may arise from them.
2. Establishing the necessary regulatory frameworks to ensure compliance with the requirements of these Instructions regarding:

• Managing transactions with related parties and monitoring them continuously.

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

• Reporting any deviations from the Bank's internal policies and the Central Bank of Jordan's instructions in this regard to Senior Executive Management and the Board of Directors, if necessary, to take appropriate actions in a timely manner.
• Ensuring the Board of Directors is informed of related party transactions periodically.
• Determining business interests associated with related parties, taking into account the principle of conflict of interest.
• Clearly defining preferential terms.

3. Determining a maximum limit for loans to Senior Executive Management in the Bank.

b. The Internal Audit Department must conduct an audit at least once a year to ensure that all transactions conducted with related parties to the Bank were conducted in accordance with effective legislation, the Bank's internal policies, and approved procedures, and submit its reports and recommendations to the Audit Committee. The Audit Committee, which emanates from the Council, must ensure that disclosures regarding transactions with related parties to the Bank are made.

Article (8): General Provisions

a. The Bank must provide the Central Bank of Jordan with a quarterly report containing the following:

1. Violations of the limits stipulated by these Instructions, including the justification for the violation and the measures taken by the Bank to correct them.
2. Any receivables on obligations of any related parties or their related parties or guarantors towards the Bank for a period equal to or exceeding (90) days, clarifying the measures taken in this regard.
3. The Bank's losses resulting from any transactions with related parties or their related parties or guarantors, clarifying the reasons and measures taken regarding them.
4. Any transaction with related parties to the Bank involving any preferential terms and the justification for it, and the measures taken to correct it.

b. In the event of a violation of the limits stipulated by these Instructions, the Bank must comply with reducing the value of the violation from the Bank's capital base.

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

c. For the purposes of these Instructions, the limits for exposures are calculated according to the calculation mechanism specified in the effective Instructions on Large Exposure Limits and Credit Granting Controls.
d. The Bank must prepare the necessary forms for identifying related parties to it, enabling it to comply with the requirements of these Instructions, with the possibility of referring to the attached forms for this purpose. e. The Central Bank, according to its discretion, may issue special orders individually for the Bank or for all banks, including removing any of the Bank's exposures towards related parties from regulatory capital, or requesting specific guarantees for such exposures. f. The Central Bank, according to its discretion, may consider certain cases that may not be considered as transactions with related parties to the Bank based on acceptable justifications from its side. g. The Bank must provide the Central Bank with reports related to exposures of related parties to the Bank on a monthly basis, with a maximum deadline of the middle of the following month, according to the forms specified for this purpose. h. For the purposes of these Instructions, the provisions of Article (11) of the Instructions on Corporate Governance for Banks No. (2/2023) and its amendments are considered an integral part of them, and full compliance with their requirements is mandatory.
i. These Instructions shall be applied as of 2027/1/1, and banks must rectify the status of existing violations of the requirements of these Instructions within a period not exceeding 2027/6/30.

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

Appendix
Model Forms

Form One: Disclosure Declaration of Related Parties

Purpose of the Form:
This form is used to provide the Bank with the necessary information and data to determine whether the submitter or any persons or entities associated with them fall within the definition of a related party according to the effective instructions.

First: Basic Data
Full Name: ______
Job Title: ______
Date of assuming office: ______
Date of filling out the form: ______

Second: Disclosure of the nature of the relationship Please specify the nature of the relationship that applies to the submitter:
[ ] Major shareholder or ultimate beneficiary of shares in the Bank.
[ ] Board member.
[ ] Senior Executive Management member.
[ ] Consultant appointed by the Council.
[ ] Hold or occupy a position in a subsidiary or affiliate company of the Bank.

Third: Details of the relationship disclosure
If any of the above cases are selected, please complete the data regarding relatives of the natural persons mentioned above, their spouses, and relatives up to the second degree, and business interests with them:

Person / Entity Name	Nature of Relationship	Degree of Kinship or Interest

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

Fourth: Declaration
I declare and confirm that all information and data contained in this form are true and complete, and that I have disclosed all relationships and interests that may fall within the definition of a related party according to the effective instructions. I undertake to notify the Bank in writing of any modification or change occurring within a period not exceeding (15) days from the date it occurs.

Name	Signature	Date

For Internal Bank Use:
The form has been reviewed and all fields have been filled out correctly, and it appears that the following parties are related parties to the Bank:

Person / Entity Name	Nature of Relationship	Degree of Kinship or Interest

Information reviewed by:
Employee | Signature | Notes, if any

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

Form Two: Annual Declaration of Related Parties

Purpose of the Form:
This form is used to confirm the accuracy of previously disclosed information regarding related parties or to update it in the event of any changes.

First: Basic Data
Full Name: ______
Employee ID: ______
Job Title: ______
Date of filling out the form: ______

Second: Disclosure Status
Please specify the status that applies to the submitter as of the date of filling out the form:
[ ] No changes have occurred to the information or relationships disclosed in the previous form.
[ ] Changes have occurred to the information or relationships disclosed, and they have been updated in this form.
[ ] None of the cases requiring disclosure of related parties apply to me anymore.

Third: Information Update
If "Changes have occurred" is selected, please provide us with the details of the change according to the table below:

Information or Relationship that Changed	Previous Status	Current Status	Date of Change

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

Fourth: Declaration
I declare that the information and data contained in this form are true and complete, and that I have disclosed all information according to the instructions. I undertake to notify the Bank of any changes occurring to the information or relationships disclosed according to the approved mechanism, without waiting for the annual declaration date:

Name	Signature	Date

For Internal Bank Use:
The form has been reviewed and all fields have been filled out correctly, and therefore I sign:

Employee | Signature | Notes, if any

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

Form Three: Immediate Disclosure upon Occurrence of Any Changes During the Year

Purpose of the Form:
This form is used for immediate disclosure of any changes occurring to the information or relationships related to related parties previously disclosed, or about any new relationship or business interest that may affect the applicability of the definition of a related party.

First: Basic Data
Full Name: ______
Job Title: ______
Date of filling out the form: ______

Second: Nature of the Change
Please specify the change that occurred:
[ ] Acquisition of a status or relationship requiring disclosure as a related party.
[ ] Termination or loss of a status or relationship previously disclosed.
[ ] Modification or change in the information or data previously disclosed.
[ ] Other changes that may affect the determination of the related party status, please clarify: ______

Third: Details of the Change

Required Information	Details
Person / Entity Involved
Nature of Relationship or Reason for Disclosure
Details of the Change
Date of the Change

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

Fourth: Declaration
I declare that the information and data contained in this form are true and complete, and that I have disclosed all relevant information according to the instructions. I undertake to notify the Bank of any changes occurring to the information or relationships disclosed according to the approved mechanism, without waiting for the annual declaration date:

Name	Signature	Date

For Internal Bank Use:
The form has been reviewed and all fields have been filled out correctly, and therefore I sign:

Employee | Signature | Notes, if any