Muscat, With the blessings of His Majesty Sultan Haitham Bin Tarik, the Central Bank of Oman (CBO) today launched a programme amending terms for the repayment of loans and personal finances granted to retirees from the public and private sectors.

 

This came in a statement issued by the Private Office reading as follows:

 

“With the blessings of His Majesty Sultan Haitham bin Tarik and, in implementation of Royal directives to consider the financial conditions undergone by public and private sector retirees, the Central Bank of Oman has launched the ‘Programme of Amending Terms for the Repayment of Loans and Personal Finances Granted to Public and Private Sector Retirees’. The programme is launched in cooperation with the banking sector represented by Oman Banks Association and in coordination with the Capital Market Authority where it pertains to the insurance sector.

 

The programme will be applied to loans and personal and housing finances granted to retired employees according to the following terms:

 

  1. The maximum loan deduction service must not exceed 30% of the monthly pension if it is equal to or less than RO1,500. If it is more than RO 1,500 the maximum ceiling of deduction must be not more than 35%. A retiree may agree with the bank about a greater percentage of deduction service provided the percentage must not exceed 50% and 60%, respectively, of the monthly pension in case of personal and housing loans as stated in previous circulars issued with regard to deduction percentages.

 

  1. Licensed banks may extend the period of repayment of loans/finances till the retiree reaches the age of 70 years. When extending the period of repayment, the banks must take into account the maximum approved percentage/limit for postponement provided that should not exceed two premiums per year, so that the postponement of premiums (during periods of Eids) would not lead to the extension of the period of repayment beyond the age of 70 years (for the retiree).

 

  1. In case the licensed banks would not be able to get a repayment of the due balance of the loan/personal finance before the retiree reaches the age of 70 years, the banks may deduct a down payment (free of early payment fees) of not more than 25% of the sum of end of service gratuity if the monthly pension is equal to or less than RO1,500 or 35% of the sum of end of service gratuity if the monthly pension is more than RO1,500. The banks may deduct more than 25% or 35% (respectively), if this is the wish of the retiree provided he/she submits an application to this effect.

 

Therefore, to help alleviate financial burdens of retirees, the banks must not make an increase over the agreed interest or profit rate. Also, for the sake of transparency, the retiree must be notified beforehand about the terms and conditions and supplied with a copy of the agreed schedule of premiums.”

 

The Central Bank of Oman is honoured to express thanks and gratitude to His Majesty Sultan Haitham bin Tarik for his Royal directives to consider the financial conditions of public and private sector retirees. The CBO also values the valuable efforts of all banks in the Sultanate and Oman Banks Association for their continuous cooperation in serving the public interest. The CBO also values the positive role of the Capital Market Authority and the insurance sector for their prompt response and willingness to provide suitable insurance products for such initiatives.

 

May the Almighty Allah protect His Majesty the Sultan, guard him as a source of inspiration for this dear nation and eternalize on the bounty of prosperity on Oman and all those who live on its land under the wise leadership of His Majesty the Sultan.

 

Source: Oman News Agency

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