To: All Licensed Banks Operating in the Sultanate of Oman

After Compliments,

Re: Personal Loans

1. Reference is invited to Circular BM 983 dated 28 December 2004.

2. In the light of the increasing scope and need for finance and requests from commercial banks to enable them to meet the demand and participate in Housing projects coming up, the Central Bank has decided to exempt residential housing loans from the reckoning of personal loan ceiling and permit commercial banks to lend housing finance up to 5% of total credit (housing loans to staff shall not be bound by this 5% as staff loans are, now, outside the purview of personal loan ceiling).

3. There shall be a minimum of 20% margin met for housing loans extended as provided for above and finance requirements meant for commercial purposes shall not be accommodated therein.

4. Quantitative ceiling on personal loans, covering henceforth non-housing personal loans, stands reduced from 42.5% (of total credit) to 40%. Banks, in excess of 40% as of now, shall ensure compliance not later than 31 March 2007.