To: All Licensed Banks operating in the Sultanate of Oman

After Compliments,

Re: Reserve Against Deposits

1. Attention of banks is invited to Circular BM 1005 dated 19 June 2006.

2. In modification thereof and in the light of considerations like liquidity management and others, Central Bank of Oman has since decided to exclude currency held by banks to be a reserve asset. Commencing from the computation period starting with 20 July 2007, licensed banks will maintain reserve, presently at 3% of specified deposit-liabilities, in the form of clearing balances with Central Bank only.

3. While all other instructions as regards reserve maintenance remain the same, enclosed are Attachments I and II - reserve maintenance reports to be submitted.

4. Licensed banks shall comply accordingly.

Best Regards,

Hamood Sangour Al Zadjali

The Executive President

Encl: Attachments I and II