To : All Licensed Banks operating in the Sultanate of Oman

Subject: Rating System for Evaluating Licensed Banks in Oman

After Compliments,

The Central Bank of Oman is pleased to advise the Licensed Banks operating in Oman that it has formulated a new Rating System for adoption by its Examination teams for evaluating the Licensed Banks’ performance during their periodical onsite examinations. The Rating System is based on the internationally recognized systems and incorporates salient features of the most widely used ones in the developed countries. In order to reinforce transparency in the evaluation of performance of the Licensed Banks, the Rating System is hereby shared with them.

The Attachment to this circular explains the Rating System in totality. It encompasses the evaluations of:

• Financial position factors

• Assets quality factors

• Management factors

• Internal operations, control and audit factors

• Earnings and profitability factors

One of the striking features of the Rating System is that the Examination teams of the Central Bank of Oman are required to evaluate the Examinee bank’s performance also with reference to the performance of the other Licensed Banks in its peer group.