Central Bank's New Regulation
Long time coming
"While stand the banks of Jordan, Jordan stands.
When fall the banks of Jordan, Jordan falls." Mary Bawabneh1
The Central Bank of Jordan (CBJ) has released new regulations on “Bank licensing fees”, replacing those from 2004.2
The new regulation introduce 2 main changes:
In 2004, banks in Jordan had to pay 35 per million (or 0.000035) on assets per year. Minimum amount 10,000 JODs. Maximum amount: 70,000 JODs. Under the new system, banks must pay 100 per million (or 0.000100) per year. That’s nearly 3x more. What’s even BETTER, there is no cap on maximum amount due to the Central Bank.
In 2004, a bank had to pay 500 JODs for every branch located inside the Kingdom. As of 2024, a bank has to pay 4,000 JODs per branch per year. 8x more.
In my opinion, this is great news. Banks have the highest tax rate at 40% but we all know that banks are smart at avoiding tax (avoiding tax is legal using legal loopholes. Evading tax is illegal).
So how much more will the CBJ earn?
According to the Association of Banks, total assets of banks hover around 66.85 billion JODs. Assuming this remains the same until the end of the year, total fees to be earned by CBJ will be: ~6.68 million JODs (compared to an estimate of 1.4 mil JODs from the old regulation)
There are 865 branches inside Jordan. Total fees to be earned by CBJ: ~3.46 mil JODs (compared to 432,500 JODs).
These new regulations 🥜 won’t break the banks (net income by banks in 2023 was ~1 billion JODS)… but the CBJ will at least be 5 times happier.
Cheeky alteration of the original from the Mary Poppins (1964) movie said by Mr. Dawes Sr. : "While stand the banks of England, England stands. When fall the banks of England, England falls."
You can download from the link below: https://doc.pm.gov.jo/DocuWare/PlatformRO/WebClient/Client/Document?did=59837&fc=7e6f119f-71f4-4ed3-8023-b6a6db8bcb15&orgId=1&_auth=DEBF1011850B5CD9C3ACDD0EED303329185E3A183CC46F4B54312CBE5D012E100F05A1323EC71B43E7F00E0E8D21E9A33669D8DED5666BD77DD89ACB7E33720C5F6AD97D48DA02E291EAD1640BCA5F022ACC5CD9DC3D8F332C0B0881B065AD458DA23B9240471FE7758A52832AFF4E54582D21A16D3124F5337FED91F54CCDE2DE02C81AC5F2184945511A1613FA27A0720894806B8972AE55348DC6BF24F02B724FD0E4487336C29FD9B2FCA0D0CAE389E6C31A670898B9C22ABC90E4A862995805D1706F2E39914E6857C35636214B5EEDEC7DD1DC024A6F4807A8A0093996CA1BE33FB79972EB939A2E2062163D87