Muscat: In a bid to provide continued financial relief to citizens affected by job losses, the Central Bank of Oman (CBO) has extended its loan deferment programme until December 2025. The scheme, initially set to end in 2024, aims to alleviate the financial burden on Omani citizens who are unemployed, offering them the opportunity to stabilise their finances until they find new employment.
The programme, first introduced in December 2023, was crafted to safeguard citizens during economic turbulence by suspending loan repayments and waiving associated interest during periods of unemployment. The recent extension, formalised in a new circular, reinforces the Sultanate of Oman’s ongoing efforts to protect its workforce from the economic impact of job losses.
The revised deferment programme covers Omani citizens who have been laid off before or after the issuance of this new circular. Eligible borrowers can now benefit from a one-year deferment period starting from the date of application or until they secure a new job — whichever comes sooner. A critical feature of the scheme is the suspension of interest or profit charges on deferred loans during this period. Moreover, loans under deferment will not be subjected to classification or provisioning requirements under International Financial Reporting Standards (IFRS 9). To ensure borrowers are not overwhelmed by legal challenges, the CBO has also instructed banks and financial leasing companies (FLCs) to suspend all legal actions against borrowers or guarantors during the deferment period.
This protection extends to both categories of eligible borrowers, fostering a sense of security for those affected by job losses. Once borrowers reenter the workforce, financial institutions will collaborate with them to reschedule loan payments. Adjustments may include reducing instalment amounts or extending repayment terms to better align with the borrower’s new income level, based on individual requests. In an effort to enhance transparency and consumer trust, the CBO has mandated that banks and FLCs clearly communicate all details of the loan deferment process to borrowers. Institutions must also secure borrower consent for any changes to loan terms, in accordance with consumer protection regulations. Furthermore, any restructuring of credit facilities after the deferment period must adhere to CBO guidelines issued in previous circulars. These measures ensure a consistent and fair process for all borrowers.
The CBO has instructed all licensed banks and FLCs to submit quarterly reports on the progress and implementation of the loan deferment scheme. Reports must be submitted within two weeks of the end of each quarter, providing the CBO with the data needed to monitor compliance and evaluate the programme’s impact.
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