Jordan's payment system generally follows international standards and codes with regard to its regulatory and supervisory framework according to information provided by the International Monetary Fund (IMF) in its 2004 Article IV Consultation report. According to a 2005 report by the Independent Evaluation Office (IEO) of the International Monetary Fund, the IMF did conduct a Financial System Stability Assessment (FSSA), which the Jordanian authorities declined to publish. However, based on information provided by the 2005 IEO report, the FSSA indicated that Jordanian payment system is a well-functioning and advanced system that exhibited a high level of compliance with international best practices. Furthermore, information provided on the Central Bank of Jordan website indicates that Jordan's Real Time Gross Settlement System (RTGS) is based on the recommendations set forth by the Bank for International Settlements (BIS) Committee on Payments and Settlement Systems (CPSS). The most recent (2007) IMF Article IV report mentions that the Central Bank of Jordan welcomed an FSAP update in 2007 once the authorities have fully implemented its payment system reforms. However, as of 2007 there is insufficient information publicly available as to Jordan's compliance with CPSS's Core Principles for Systemically Important Payment Systems.

General Overview

The 2004 Article IV Consultation report by the International Monetary Fund (IMF) indicates that Jordan's payment system generally follows international standards and codes with regard to its regulatory and supervisory framework. According to a 2005 report by the Independent Evaluation Office (IEO) of the International Monetary Fund (IEO), improving the national payment system was among Jordan's reforms. The IMF has been providing technical assistance to Jordan's reforms especially in improving the Central Bank of Jordan's (CBJ) supervisory and reporting practices and aligning them to international standards. Moreover the 2005 IEO report also mentions that, according to CBJ officials, the goal of achieving international standards motivates Jordan's authorities to pursue reforms.

According to the 2005 IEO report, the IMF did conduct a Financial Sector Assessment Program for Jordan and reported its finding in a Financial System Stability Assessment (FSSA) report, which the Jordanian authorities declined to publish. However, based on information provided in the IEO report, the FSSA found the Jordanian payment system to be a well-functioning advanced system and exhibited a high level of compliance with international best practices. Furthermore, the most recent (2007) IMF Article IV report mentions that the Central Bank of Jordan welcomed an FSAP update in 2007, once the authorities have fully implemented the payment system reforms.

The CBJ manages and operates two Payment Systems in Jordan, namely, the national real-time gross settlement (RTGS) system, RTGS-JO, and the High Volume Check Clearing System. (HSBC n.d.) The CBJ website reports that the Jordanian real-time gross settlement system (RTGS-JO) is an electronic system centrally operated designed to handle credit transfers. According to the website, the system is designed based on the recommendations set forth by the Bank for International Settlements (BIS) Committee on Payments and Settlement Systems (CPSS). The website asserts that the system is based on the principles of safety and efficiency, and that all banks in Jordan and required to be members of the RTGS-JO.

According to the CBJ website, the RTGS-JO is operated on the following terms: (1) member banks' accounts are held at the CBJ; (2) the Society for Worldwide Interbank Financial Telecommunication (SWIFT) is used as messaging system; (3) overdrawing is not allowed; (4) all payments are final and irrevocable; (5) there is a central queue management; (6) for member accounts a system of Real Time Continuous On Line Monitoring is used; (7) intraday liquidity provision and multi-currency system is applied; is applied; (8) Price vs. Payment (PvP) mechanism for local foreign exchange trades is applied; (9) Delivery vs. Payment (DvP) for government securities and CBJ's CDs is applied; and (10) Settlement of Netting Systems is applied (CBJ website).

The Principles

I. The system should have a well-founded legal basis under all relevant jurisdictions.

II

There is insufficient information publicly available as to Jordan's compliance with this principle. However, information provided on the CBJ website indicates that the Real Time Gross Settlement System - Jordan (RTGS-JO) is designed based on the recommendations set forth by the Bank for International Settlements (BIS) Committee on Payments and Settlement Systems (CPSS).

II. The system's rules and procedures should enable participants to have a clear understanding of the system’s impact on each of the financial risks they incur through participation in it.

II

There is insufficient information publicly available as to Jordan's compliance with this principle. However, information provided on the CBJ website indicates that the Real Time Gross Settlement System - Jordan (RTGS-JO) is designed based on the recommendations set forth by the Bank for International Settlements (BIS) Committee on Payments and Settlement Systems (CPSS).

III. The system should have clearly defined procedures for the management of credit risks and liquidity risks, which specify the respective responsibilities of the system operator and the participants and which provide appropriate incentives to manage and contain those risks.

II

There is insufficient information publicly available as to Jordan's compliance with this principle. However, information provided on the CBJ website indicates that the Real Time Gross Settlement System - Jordan (RTGS-JO) is designed based on the recommendations set forth by the Bank for International Settlements (BIS) Committee on Payments and Settlement Systems (CPSS).

IV. The system should provide prompt final settlement on the day of value, preferably during the day and at a minimum at the end of the day. (Systems should seek to exceed the minima included in this Core Principle.)

II

There is insufficient information publicly available as to Jordan's compliance with this principle. However, information provided on the CBJ website indicates that the Real Time Gross Settlement System - Jordan (RTGS-JO) is designed based on the recommendations set forth by the Bank for International Settlements (BIS) Committee on Payments and Settlement Systems (CPSS). According to the CBJ website, the Real Time Gross Settlement System - Jordan (RTGS-JO) settles in real time and settlements are final and irrevocable.

V. A system in which multilateral netting takes place should, at a minimum, be capable of ensuring the timely completion of daily settlements in the event of an inability to settle by the participant with the largest single settlement obligation. (Systems should seek to exceed the minima included in this Core Principle.)

II

There is insufficient information publicly available as to Jordan's compliance with this principle. However, information provided on the CBJ website indicates that the Real Time Gross Settlement System - Jordan (RTGS-JO) is designed based on the recommendations set forth by the Bank for International Settlements (BIS) Committee on Payments and Settlement Systems (CPSS). According to the CBJ website, the RTGS-JO settles in real time and settlements are final and irrevocable. It also provides a central settlement point for all netting systems in Jordan.

VI. Assets used for settlement should preferably be a claim on the central bank; where other assets are used, they should carry little or no credit risk and little or no liquidity risk.

II

There is insufficient information publicly available as to Jordan's compliance with this principle. However, information provided on the CBJ website indicates that the Real Time Gross Settlement System - Jordan (RTGS-JO) is designed based on the recommendations set forth by the Bank for International Settlements (BIS) Committee on Payments and Settlement Systems (CPSS). According to the CBJ website, the Accounts of member banks in Jordan Dinar held at the Central Bank of Jordan are used as settlement accounts for the RTGS-JO system.

VII. The system should ensure a high degree of security and operational reliability and should have contingency arrangements for timely completion of daily processing.

II

There is insufficient information publicly available as to Jordan's compliance with this principle. However, information provided on the CBJ website indicates that the Real Time Gross Settlement System - Jordan (RTGS-JO) is designed based on the recommendations set forth by the Bank for International Settlements (BIS) Committee on Payments and Settlement Systems (CPSS). According to the CBJ website, the RTGS-JO system is based on the principles of safety and efficiency.

VIII. The system should provide a means of making payments which is practical for its users and efficient for the economy.

II

There is insufficient information publicly available as to Jordan's compliance with this principle. However, information provided on the CBJ website indicates that the Real Time Gross Settlement System - Jordan (RTGS-JO) is designed based on the recommendations set forth by the Bank for International Settlements (BIS) Committee on Payments and Settlement Systems (CPSS). According to the CBJ website, the RTGS-JO system is based on the principles of safety and efficiency.

IX. The system should have objective and publicly disclosed criteria for participation, which permit fair and open access.

II

There is insufficient information publicly available as to Jordan's compliance with this principle. However, information provided on the CBJ website indicates that the Real Time Gross Settlement System - Jordan (RTGS-JO) is designed based on the recommendations set forth by the Bank for International Settlements (BIS) Committee on Payments and Settlement Systems (CPSS).

X. The system's governance arrangements should be effective, accountable and transparent.

II

There is insufficient information publicly available as to Jordan's compliance with this principle. However, information provided on the CBJ website indicates that the Real Time Gross Settlement System - Jordan (RTGS-JO) is designed based on the recommendations set forth by the Bank for International Settlements (BIS) Committee on Payments and Settlement Systems (CPSS).

A. The central bank should define clearly its payment system objectives and should disclose publicly its role and major policies with respect to systemically important payment systems.

II

There is insufficient information publicly available as to Jordan's compliance with this principle. However, information provided on the CBJ website indicates that the Real Time Gross Settlement System - Jordan (RTGS-JO) is designed based on the recommendations set forth by the Bank for International Settlements (BIS) Committee on Payments and Settlement Systems (CPSS).

B. The central bank should ensure that the systems it operates comply with the Core Principles.

II

There is insufficient information publicly available as to Jordan's compliance with this principle. However, information provided on the CBJ website indicates that the Real Time Gross Settlement System - Jordan (RTGS-JO) is designed based on the recommendations set forth by the Bank for International Settlements (BIS) Committee on Payments and Settlement Systems (CPSS).

C. The central bank should oversee compliance with the Core Principles by systems it does not operate and it should have the ability to carry out this oversight.

II

There is insufficient information publicly available as to Jordan's compliance with this principle. However, information provided on the CBJ website indicates that the Real Time Gross Settlement System - Jordan (RTGS-JO) is designed based on the recommendations set forth by the Bank for International Settlements (BIS) Committee on Payments and Settlement Systems (CPSS).

D. The central bank, in promoting payment system safety and efficiency through the Core Principles, should cooperate with other central banks and with any other relevant domestic or foreign authorities.

II

There is insufficient information publicly available as to Jordan's compliance with this principle. However, information provided on the CBJ website indicates that the Real Time Gross Settlement System - Jordan (RTGS-JO) is designed based on the recommendations set forth by the Bank for International Settlements (BIS) Committee on Payments and Settlement Systems (CPSS).