Trade Financing

Jordan’s banking sector

Jordan’s banking sector is the strongest segment of its financial services industry, with a history dating back to 1948.

Banks' domestically consolidated assets amounted to 97 percent of financial sector assets, or 180 percent of GDP, at end-2021, making it one of the largest economic sectors in the Kingdom, the banking sector also has a substantial presence abroad.

As a result, globally consolidated assets are significantly larger, reaching 304 percent of GDP. At end-2021, the banking system comprised 23 banks, of which six were classified as D-SIBs⁽¹⁾ and four were Islamic.⁽²⁾

In January 2017, the CBJ established the Jordan Payments and Clearing Company, with an aim to establish and develop digital retail and micro payments along with the investment in innovative technology and digital financial services . ⁽³⁾

In October 2021, The Central Bank of Jordan (CBJ) started a process over the potential introduction and licensing of digital banks, which aims to automate all front-end, back-end and middle-end operations. The CBJ is also exploring the possibility of launching the central bank digital currency (CBDC) would be linked to the Jordanian dinar and have legal standing. Full adoption and implementation could take five years. ⁽⁴⁾

Islamic Finance ⁽⁵⁾

Islamic finance holds considerable potential for future expansion in Jordan, ranking the kingdom ninth among the top-10 Islamic finance industries globally, receiving strong support from the Jordanian government.

There are three Islamic banks operating in the market:

• Jordan Islamic Bank,
• Safwa Islamic Bank, and
• Islamic International Arab Bank.

^{(1) Domestic Systemically Important Banks.}

^{(2) IMF e-Library, "Jordan: Financial System Stability Assessment ", April 2023.}

^{(3) 2022 Investment Climate Statement , Jordan , US Department of State.}

^{(4) ibid}

^{(5) Oxford Business Group;” Jordan’s banking sector leading growth in financial services sector”.}