Salameh Al-Derawi

Banks in Jordan played a crucial role in enhancing economic stability in light of the Corona pandemic. The Central Bank was the first initiator of this move at the official level through financial measures and incentives provided at the beginning of the pandemic which provide the way for the banking sector to move to reduce the pandemic repercussions.

The pandemic showed the banking sector financial strength and its ability to deal with high flexibility with any emergency developments without leaving negative effects on the various sectors as it was the main lifeline for many of them through packages of coordinated and integrated measures taken in the recent period.

The banking sector played its usual and natural economic role in light of the Corona crisis and did not tremble as happened in neighboring countries. Bank transfers to and from the Kingdom continued very smoothly and without any signs of regression.

In official figures, the banking sector has topped the national sectors that joined forces to face the repercussions of the pandemic as banks pumped additional financing into the economy by raising credit facilities granted at a value of 1618 million Dinars during the first ten months of 2020, and they also postponed individual loan installments with a total value of 800 million Dinars during the same period.

On the other hand, banks implemented the Central Bank’s program to support small and medium-sized companies amounting to 500 million Dinars. 450 million Dinars were granted from which 4,922 small and medium companies benefited, including 178 million Dinars to finance the salaries of more than 84,000 employees while extending the period the program beneficiaries to the end of 2021.

237 million Dinars were granted through the Central Bank’s program to support and finance the economic sectors benefiting 271 companies, and 61 million Dinars were allocated to finance the salaries of more than 47,000 employees.

In parallel, banks postponed installments, restructuring and scheduling facilities for companies affected by the repercussions of the pandemic with a value of more than 3 billion Dinars. Banks funded Jordanian treasury with more than 2.2 billion Dinars by subscribing to government bonds during the first 11 months of last year.

The banks’ reduction of interest rates on existing facilities starting in May by 150 basis points for individuals, retail customers and small and medium-sized companies and 100 basis points for the best customers had a tangible positive impact on all segments of society.

The crisis also showed that banks in Jordan possess a sophisticated and secure technological infrastructure that allowed them to provide most of their services electronically without the need for customers to visit bank branches.

The Jordanian banking sector continued during closures to provide liquidity to various sectors, including the external sector, which led to the continuity of the flow of exports and imports and contributed to the continuity of the economy as a whole.

This strong presence of banks during the crisis gave more impetus to government measures and provided reassuring signals to investors in various sectors.

Banks have also rushed to support national efforts to confront the Corona crisis as their donations to the Hemmat Watan Fund, the Ministry of Health and the Charity Account exceeded 37 million Dinars.

The high response of banks has confirmed that they are a safety valve for the economy, and that they are strong national institutions that have the ability to withstand various challenges in addition to their readiness to harness all their capabilities to serve Jordan.