To: All Licensed Commercial Banks in the Sultanate of Oman

Sub: Master Circular on Lendings to Non-Residents and Placements of Bank Funds Abroad

1. Lendings to non-residents and placements of funds abroad involve the banks assuming higher degree of country, transfer, credit, currency, reputational and legal risks and have multiple implications for the country, the Central Bank and the banks. Banks are also exposed to heightened competition in the international financial markets. At the same time, it may not be prudent to preclude banks from tapping gainful cross-border business opportunities in the context of liberalization and globalization. Under these circumstances, it is necessary to mitigate the underlying risk profile of such exposures through prudential regulations and risk limits, for maintaining financial stability and solvency of the licensed banks.