Regulatory Alerts2022-04-30
Added · Updated
Instructions on the Implementation of AAOIFI Financial Accounting Standards No 6/2020
The Central Bank of Jordan issues Instructions No 6/2020 requiring Islamic banks to implement AAOIFI Financial Accounting Standards 30, 35, 33, and 26 regarding asset deterioration, risk reserves, and investments. The directive mandates that banks maintain a surplus general banking risk reserve restricted from dividend distribution and limits real estate investments to 50% of client deposits and 40% of regulatory capital. It further requires the use of automated systems for expected credit loss calculations, external auditor verification of these procedures, and adherence to specific capital adequacy adjustments for provisions.