"It has been proved to the Central Bank of Jordan that the Arab Bank, like all banks operating in the kingdom, has always shown a compliance with regulations and laws," the CBJ Governor Umayya Toukan said on Wednesday.
His strong defence came in response to an $875 million lawsuit filed by relatives of US citizens killed or injured in violence in Israel, accusing Jordan's Arab Bank of helping move money to families of human bombers.
Toukan said the lawsuit was a bid to undermine confidence in the kingdom's banking system.
"The Central Bank of Jordan will not allow any one to cast doubt on the compliance of the Jordanian banking system with international standards," he said.
"The Central Bank of Jordan will not allow any one to cast doubt on the compliance of the Jordanian banking system with international standards"
The lawsuit filed on 2 July before a district court in Brooklyn accuses the Arab Bank and its New York branch of converting funds raised in Saudi Arabia into US dollars and giving the money to branches in the West Bank and Gaza.
It has been alleged that families of Palestinian fighters and the resistance group Hamas withdrew the money subsequently.
A bank official told Aljazeera's correspondent in Amman, Hassan al-Shobaki, that the allegations were "nonsense".
Senior Jordanian bankers said the lawsuit was politically influenced by Israeli lobbyists seeking to undermine the bank's key role in underpinning the local Palestinian economy.
The Arab Bank, one of the Middle East's biggest financial institutions, was established in Jerusalem in the 1930s by the Palestinian Shoman family and has the lion's share of Palestinian deposits in the occupied West Bank.