CBO interest rate ceiling explained

Updated 21 Oct 2026

CBO caps the rate a bank in Oman may charge on loans against salary to individuals. Unlike in some countries, the ceiling is a fixed number written in CBO's circular — not a margin over a policy rate. It does not cover loans not based on salary, and finance and leasing companies have no CBO rate cap at all.

Housing loans, personal loans and overdrafts against salary: at most 6% a year. Credit cards against salary: at most 18% a year. The rate must be the effective rate on the reducing balance — no flat rates and no low teaser rate that rises later. CBO says the ceiling may change from time to time.

Not a valid document. Estimate for information only — not financial advice, not an offer of credit and not a bank document. Errors are possible. Only your bank's or finance company's official offer letter, contract and statements are binding.

The ceilings

The ceilings — Oman
Product	CBO ceiling
Housing loan	6% a year
Personal loan	6% a year
Overdraft against salary	6% a year
Credit card against salary	18% a year
Late (penal) interest	1% a year on the overdue amount, for the overdue period only

The circular covers conventional banks and Islamic banking entities: for Islamic finance the ceiling applies to the profit rate. CBO ceiling on the interest (or profit) rate of housing loans, personal loans and overdrafts against salary: 6% a year — CBO says the ceiling may change from time to time.

How the rate must be quoted

Reducing balance: Rates must be the effective rate on the reducing balance — no flat rates; no low teaser rate that rises later.
Variable rates: A change in a variable rate must be notified to the borrower two months before it takes effect.
In adverts: Where a personal loan has more than one rate (a lower rate first, a higher one later), the bank must show every rate with its period, how often the rate is reset and the effective rate for the term, in all documents and on its website.

The repo rate is not the ceiling

The CBO repo rate is 4.50% (raised from 4.25% with effect from 17 September 2026). The repo rate is what CBO charges banks; nobody borrows from a bank at it. CBO's circular sets the 6% ceiling as a fixed number — it is not defined as a margin over the repo rate, so a repo-rate move does not change the ceiling by itself. A bank's own rate may move within the ceiling; if your rate is variable, you must be told 2 months ahead.

Worked example: what half a point does

A personal loan of OMR 10,000 over 60 months (our assumption):

At the 6% ceiling: OMR 193.328 a month, OMR 1,599.681 interest in total.
At 5.5%: OMR 191.012 a month — OMR 2.316 less, OMR 138.984 less interest over the loan.
At 6.5%: OMR 195.661 a month, but that rate is above the 6% ceiling, so CBO does not allow it.

See your own numbers: personal loan calculator · housing loan calculator · credit card: the minimum payment trap. Fees on top of the rate: loan fees in Oman.

CBO's limits come from its Master Circular on Personal Loans/Finance (BM 1213, 13 February 2025); CBO says its 6% ceiling may change from time to time — your bank's offer is what counts.

Questions people ask

What is the maximum interest rate on a loan in Oman?

CBO's ceiling is 6% a year for housing loans, personal loans and overdrafts against salary, and 18% for credit cards against salary. CBO says the ceiling may change from time to time.

Is the ceiling linked to the CBO repo rate?

No — CBO's circular sets the ceiling as a fixed number. The repo rate, 4.50% since 17 September 2026, is what CBO charges banks.

Can a bank quote a flat rate in Oman?

No — in Oman, rates must be the effective rate on the reducing balance; flat rates and low teaser rates that rise later are not allowed.

Can my bank change a variable rate?

Yes — in Oman, within the ceiling, but the change must be notified to you 2 months before it takes effect.

Sources (4)

Rules this page uses: 9, from 4 source documents. Each rule shows the date we last checked it.

CBO ceiling on the interest (or profit) rate of housing loans, personal loans and overdrafts against salary: 6% a year — CBO says the ceiling may change from time to time. (source, checked 2026-10-19)
CBO ceiling on the interest (or profit) rate of credit cards against salary: 18% a year. (source, checked 2026-10-11)
Rates must be the effective rate on the reducing balance — no flat rates; no low teaser rate that rises later. (source, checked 2026-10-11)
A change in a variable rate must be notified to the borrower two months before it takes effect. (source, checked 2026-10-11)
Late (penal) interest at most 1% a year, on the overdue amount and for the overdue period only; Islamic banks: the same 1% ceiling on default penalties. (source, checked 2026-10-19)
The CBO repo rate is 4.50% (raised from 4.25% with effect from 17 September 2026). (source, checked 2026-10-11)
Personal loans not based on salary, and loans against your own term deposits, fall outside these limits. (source, checked 2026-10-11)
CBO does not cap the interest rates of finance and leasing companies, unlike banks; in 2013 it found rates as high as 24% a year and told the companies to review them and be moderate. (source, checked 2026-10-12)
Where a personal loan has more than one rate (a lower rate first, a higher one later), the bank must show every rate with its period, how often the rate is reset and the effective rate for the term, in all documents and on its website. (source, checked 2026-10-12)

This page's sources on the sources page, with every other page in this section →