Central Bank of Oman is pleased to inform banks that with effect from the date of this Circular, all lending interest rates except those in regard to Consumer Loans will stand deregulated. Accordingly, the provisions of Oman Central Bank Circular No. BM703/1993 dated 25 September 1993 relating to the maximum permissible rate of 10.75% per annum on lending are hereby withdrawn.

Banks should note, however, that all CBO Circulars relating to interest rates on Consumer Loans will continue to have full force and effect.

Given the current interest rate structure in the Sultanate, CBO fervently hopes that the freeing of deposit and lending rates from the regulatory regime and subjecting them to the play of market forces will have wholesome and salutary effects on the whole economy and that lending interest rates, particularly, will stabilize at reasonable levels.

It needs also to be mentioned in this connection, that CBO will not tolerate any cartel arrangements among banks to artificially push up the cost of credit or any attempt unreasonably widen interest margins. CBO will very closely watch the banks’ performance in this regard and take appropriate steps.