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INTRODUCTION TO CERTIFICATES
OF DEPOSIT
Certificates of Deposits:
Certificate of Deposit is a
short term financial deposit instrument issued by Central Bank to licensed
Banks, at the time when Central Bank considers it appropriate.
Primary objective of Certificates of Deposit (CD) instrument is to assist
the money market in the Sultanate at a time when the persistent excess liquidity
prevailing in the market requires remedial action/steps for the protection and
maintenance of a healthy and stable money market. In addition, CDs may also be
used by CBO as a monetary instrument for any other policy consideration. The CDs
mop up excess liquidity from the banking sector and thus enable CBO to stabilize
the money market liquidity position. The CDs can be used by the holding banks to
obtain funds from CBO through Repos/buy back, as also for inter-bank Repo
transactions.
Method of Issuance of
Certificates of Deposit
i) Certificates of Deposit
will be issued by tender on every Monday by Central Bank of Oman. CBO will not
issue separate invitation for each issue. Banks wishing to apply for CD’s should
submit their sealed application to Monetary Operations Domain of the Central
Bank between 08:00 to 12:00 hours Oman local time in the tender box kept at
CBO’s Head Office.
ii) CDs will be allotted on Tuesdays and Allotment Advices shall be sent to
the successful banks.
iii) CDs are issued on Wednesdays and the clearing accounts of allotted
banks will be debited with the principal amount allotted on the same day.
iv) On the maturity date, the clearing account of the banks will be credited
with the principal amount plus interest earned.
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