All Licensed Commercial Banks Operating in the Sultanate of Oman

After Compliments,

Subject: Investments in Shares and Securities

1. Reference is invited to Circular BM 886 dated 27 March 2000 on the above-mentioned subject.

2. It has since been decided that all investments coming under Articles of 65(b)(1) and 65(b)(4) of Oman Sultani Decree No. 114/2000, the Banking Law as regards bonds and shares, including investments overseas, shall be within the discretion of licensed banks.

3. Banks shall note the following in this connection:

   • i) Banks shall strictly adhere to the limitations stipulated for overall investments and overseas investments in the above Articles.

     ii) The Central Bank, while affording operational flexibility, expects banks to be reasonably conservative in investment decisions and have appropriate balance between risks and rewards. Needless to add that classification, valuation etc. will be governed by applicable IAS/CBO requirements.

     iii) While there shall be no investments in capital and similar instruments of local banks, prior reference shall be made for investments in all related companies.