The Central Bank of Jordan (CBJ) has declined to confirm or deny news reports that it is planning to double the capital requirement of commercial banks to encourage bank mergers.
Bank Governor Umayya Toukan did say, however, that "such a decision should take into consideration the capital of each bank and its activities," the Jordan Times reported.
Toukan said, "It is not easy to swallow that some smaller banks extend such large credit facilities to some of their clients."
"The bank's capital should be compatible with its activities," the governor said.
If the CBJ decides to raise the capital requirement it will be the second such move in less than two years.
In 1999, the Central Bank instructed commercial banks to double their minimum capital from JD10 million to JD20 million.
A well-informed source was quoted by the Amman-based paper as saying that he expected a doubling of the present capital requirement "as early as January."
The source, who asked not to be named, told the daily that the decision was reached by "the concerned authorities" in the past two weeks. Although the proposal was to increase it to JD30 million "I believe that it will be raised to JD40 million," he said - Albawaba.com
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