AMMAN — Banks in Jordan have the
right to raise interest rates without consulting borrowers, according to Director-General
of the Jordan Banks Association (JBA) Maher Al-Mahrouq, Hala News reported.
اضافة اعلان
The Consumer Protection Department at the
Central Bank of Jordan (CBJ) has been receiving complaints about banks raising
interest rates without informing borrowers, according to the department
director, Raja Al-Khawaldeh.
In a statement issued on Thursday, Mahrouq
explained that, as stipulated in the contract signed between the two parties (a
bank and a borrower), the bank has the right to raise interest rates in
accordance with the decisions of the
CBJ, which also supervises all loan
contracts.
“The
contract is the law,” Khawaldeh said. “Borrowers allow banks to raise interest
rates within their contracts,” which include a clause to that effect.
“The contract is the law,” Khawaldeh said. “Borrowers allow banks to raise interest rates within their contracts.”
An increase in a loan’s interest rate is
generally linked to a rise in national interest rates, according to Mahrouq.
However, banks may not raise interest rates on loans at the full rate of
national hikes, as this would place “a huge burden on borrowers”. Instead, the
rate of increase is determined by market competition and other financial
determinants, he explained.
In 2022, the CBJ raised interest rates in
the Kingdom seven times, with a combined hike of 4 percent, however this
increase has not been fully reflected in loan interest rates, he said.
Mahrouq pointed out that borrowers have the
right to submit objections with the central bank’s Consumer Protection
Department, which, according to Khawaldeh, deals with and resolves all
complaints.
Read more Business
Jordan News
.jpg)
.jpg)
