Interest Rates on Deposits and Facilities Instructions No. (14-2002) dated 15-12-2002

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

Amman 2002 Library of the Arab Emirate
The Arab Financial Capital

19749
Number: /2/10
Date: 11/6/1423 AH
Corresponding to: 15/5/2002 AD

Interest Rates on Deposits and Facilities Instructions No. (14/2002) Issued by the Central Bank of Jordan pursuant to the provisions of Article (9/b) of the Banking Law

Based on the provisions of Article (43) of the Central Bank Law No. (23) of 1971 and its amendments, and Article (44) of the Banking Law No. (28) of 2000, and in light of the Central Bank's pursuit of flexibility in approving interest rates on deposits and facilities and to ensure greater competition and transparency in this field, the following is approved:

First: Banks shall determine the interest rates they pay on various types of deposits and the interest rates and commissions they charge on various types of credit facilities.

Second: Banks must inform customers in writing of the terms and all costs of loans, including the annual interest rate, various fees and commissions, the loan amount and date, its maturity date, and its terms, including late payment fees.

Third: (a) Each bank must determine weekly and announce in a prominent place in all its branches comprehensive information regarding the interest rates it pays on deposits and the interest it charges on facilities, according to their tenors, types, terms, and calculation methods. The bank must commit to ensuring that actual interest rates are as close as possible to the announced rates throughout their duration.

(b) The bank shall determine interest rates on facilities and deposits at the beginning of each week, and these rates shall remain in effect for a full week. The bank must inform the Central Bank of Jordan on Tuesdays of each week regarding the interest rates it will adopt starting from the beginning of the following week, according to Attachment No. (1).

(c) The bank must adhere to the announced prices. The Central Bank of Jordan may announce, as it deems appropriate, information regarding the actual prices applied by each bank and the degree of deviation from the announced price.

Fourth: Banks shall continue to prominently announce to their customers and through various media the Prime Lending Rate, while ensuring banks provide a clear and specific definition of "best customers" and announce it. This shall not include the government, public institutions, or companies in which the government owns a percentage exceeding (50%).

Fifth: (a) Banks must adhere to the principles set out in Attachment No. (4), which determine:

• 1- Methods for calculating interest and commissions on direct credit facilities in Dinars of various types and their maturity dates.
• 2- Methods for calculating interest on various types of deposits in Dinars and their payment dates.

(b) Licensed banks must inform their customers of the calculation methods mentioned in item (a) above.

Sixth: (a) All previous instructions related to the above are repealed, including our following memoranda and circulars:

Memorandum Number	Date
90/11	1990/1/16
90/26	1990/2/3
93/66	1993/6/28
95/160	1995/7/2
Circular (1375/10)	2000/1/27
Circular (2032/3/2/10)	2001/7/14

(b) These instructions shall be implemented from their date.

Governor
Dr. Ammar Touqan
(Signature)

Attachment No. (1)
Announced Interest Rates on Deposits and Facilities for the week starting on Sunday, corresponding to / /

First: Customer deposits in Jordanian Dinars:

Deposit Type	Interest Rate %
Demand	Minimum	Maximum
Savings
One month term
Three months term
Six months term
One year term

Second: Direct credit facilities in Jordanian Dinars:

Type of Credit Facility	Interest Rate %
	Commission Rate	Minimum	Maximum
Due within a maximum of one year
Due within a maximum of three years
Due for a period exceeding three years

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

Attachment No. (2)
Actual Interest Rates on Deposits and Facilities.
Month ...... of the year ...........

First: Interest rates paid on deposits:

(a) Interest rates paid on customer deposits in Jordanian Dinars within the Kingdom:

| Deposit Type | Actual Interest Rate % | | |
|---|---|---|---|
| | Lowest Rate | Highest Rate | Average |
| Demand | | | |
| Savings | | | |
| Term | | | |
| Certificates of Deposit | | | |
| Total Deposits | | | |

(b) Interest rates paid on customer deposits in Jordanian Dinars at Palestinian branches:

| Deposit Type | Actual Interest Rate % | | |
|---|---|---|---|
| | Lowest Rate | Highest Rate | Average |
| Demand | | | |
| Savings | | | |
| Term | | | |
| Certificates of Deposit | | | |
| Total Deposits | | | |

CENTRAL BANK OF JORDAN
البنك المركزي الأردني

Second: Local corporate loans excluding banks, distributed by interest rates (in million Dinars)*

| Approved Current Account Debit | Loans Approved Last Month Term Loans Drawn | | | | Actual Interest Rate Annual Percentage |
|---|---|---|---|---|---|
| | Other Sectors | Commercial | Industry | Construction and Real Estate | |
| | | | | | Up to 4 |
| | | | | | 5 - 4 |
| | | | | | 6-5 |
| | | | | | 7-6 |
| | | | | | 8 - 7 |
| | | | | | 9 - 8 |
| | | | | | 10 - 9 |
| | | | | | 11 - 10 |
| | | | | | 12 - 11 |
| | | | | | 13 - 12 |
| | | | | | 14 - 13 |
| | | | | | 15 - 14 |
| | | | | | 16-15 |
| | | | | | 17-16 |
| | | | | | 18 - 17 |
| | | | | | More than 18 |

* Note: Amounts represent total term loans drawn and approved current account debits during the months of March, June, September, and December of each year.

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CENTRAL BANK OF JORDAN
البنك المركزي الأردني

Third: Individual loans distributed by interest rates (in million Dinars)*

| Amounts Drawn Last Month by Loans and Collateral | | | | | Actual Interest Rate Annual Percentage |
|---|---|---|---|---|---|
| Other Individual Loans | Credit Cards | Transferred Salaries | Other Deposits and Collateral | Car Mortgages | Real Estate Mortgages |
| | | | | | Up to 6 |
| | | | | | 7-6 |
| | | | | | 8 - 7 |
| | | | | | 9 - 8 |
| | | | | | 10 - 9 |
| | | | | | 11 - 10 |
| | | | | | 12 - 11 |
| | | | | | 13 - 12 |
| | | | | | 14 - 13 |
| | | | | | 15 - 14 |
| | | | | | 16 - 15 |
| | | | | | 17-16 |
| | | | | | 18 - 17 |
| | | | | | 20 - 18 |
| | | | | | More than 20 |

*Note: Amounts represent total loans drawn during the months of March, June, September, and December of each year.

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CENTRAL BANK OF JORDAN
البنك المركزي الأردني

Attachment No. (4)
Bases for Calculating Interest and Commissions

First: Interest and commissions on direct facilities are calculated as follows:

(a) Discounted Bills
Interest and commission are calculated and collected in advance based on the number of days plus (5) days.

(b) Current Account Debit
The commission is calculated and collected in advance on the limit granted for a full year, while interest is calculated and added at the end of each month based on the daily balance.

(c) Loans
- 1- Interest is calculated based on the maturity period of installments and paid upon the maturity of each installment. In case of a grace period, interest is calculated and paid during this period as agreed.
- 2- Commission
- The commission is collected as a lump sum in advance each year for the life of the loan that is repaid in a single installment.
- For loans agreed to be repaid in installments with a duration exceeding one year, a lump sum commission is collected in advance covering one year, taking into account the value of installments to be repaid during the year according to the repayment schedule.

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CENTRAL BANK OF JORDAN
البنك المركزي الأردني

(d) Syndicated Loans
The calculation of interest and commission and their collection are subject to the conditions of agreements concluded for this purpose.
(e) The year is considered (360) days for this purpose.

Second: Interest on deposits is calculated as follows:

(a) Current Accounts / Demand Deposits: Interest is calculated monthly based on the daily balance.

(b) Savings Deposits: Calculated monthly based on the lowest balance and added as agreed with the customer, and after a maximum of six months, unless the account is closed, in which case it is paid on the closure date based on the lowest balance during the month preceding closure.

(c) Term Deposits: Calculated according to the deposit term and added on the maturity date.

(d) The year is considered (365) days for this purpose.

(e) In the event that any customer withdraws their deposit partially or fully before maturity, interest is calculated according to the following formula:
(Value of Deposit × Selected Interest Rate × Deposit Term) minus (Part of Deposit Withdrawn × Highest Announced Interest Rate on the Date of Withdrawal for a Term Similar to the Withdrawn Deposit Term plus (2%) × Remaining Term for the Withdrawn Deposit). Provided that the customer does not lose any amount of the principal of the pledged deposit.

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