To: All Licensed Banks Operating in the Sultanate of Oman

Subject: Performance Bonds/Guarantees Issued by Banks

1. Attention of all banks is invited to Oman Central Bank Circular No. BM443/1986 and Oman Central Bank Circular No. BM515/1988 dated February 29, 1986 and September 14,1988 respectively pertaining to the need to maintain particulars of expired Bonds/Guarantees in Banks’ books, follow-up their return for cancellation and for updating of banks’ records.

2. It may be noted that the need to pursue such a course of action in regard to expired Bonds/Guarantees was stipulated by the Central Bank in order to ensure that the banks would follow-up all such expired Bonds/Guarantees, recall them from the beneficiaries for cancellation and updating of banks’ records. In the circumstances it is advised that the banks continue to comply with the Circular requirements.

3. Banks shall however note that with regard to the determination of outstanding Bonds/Guarantees for purposes of computation of individual customer obligations etc., the banks may exclude the value of expired Bonds/Guarantees after ascertaining that no obligation will arise against such expired Bonds/Guarantees.