To: All Licensed Banks operating in the Sultanate of Oman

After Compliments,

Sub: Banking Business- Providing Commodity Hedging Products

1. The Board of Governors of the Central Bank of Oman, in their meeting of 14 June 2006, resolved to authorize providing commodity hedging products as banking business under Article 5 of Oman Sultani Decree No. 114/2000

2. Licensed banks, proposing to undertake the business, should take specific prior approval of the Central Bank, providing, in detail, their proposal highlighting the targeted business and risk management preparedness.

   The value of aggregate transactions, to start with, of a bank on gross basis will be limited to 5% of its net worth and the limit will be reviewed by the Central Bank from time to time.

3. The following will be the broad guidelines to be followed in this connection: