Recent restrictions on commercial banks to confine repayment of personal loan to a maximum of 50 per cent of borrower's salary as equated monthly instalment (EMI) and a maximum loan tenure of ten years are expected to ease the burden of borrowers to a large extent and thereby reduces chances of an imminent debt trap, a top-level official of the Central Bank of Oman told Times of Oman.
The Sultanate's banking regulator last week said commercial banks cannot deduct more than 50 per cent of the borrowers' salary as EMI for personal loan, 60 per cent for housing loans, a maximum repayment period of 10 years for personal loans and 25 years for housing loans.
"We do not like to (over) burden the borrowers with a high amount of loan and for an unreasonably long period of time. A ten year entitlement will be adequate for the requirement of a borrower,- said Hamoud Sangour Al Zadjali, executive president of CBO.
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