English abstract
The Omani legislation regulates loan interest in the Oman Commercial Law,
issued in 1990, granting creditors the right to gain financial interest from loans given
to debtors. The legislator instructed Ministry of Commerce and Industry to develop a
framework for loan interest in coordination with Oman Chamber of Commerce. The
researcher sees that the Ministry of Commerce and Industry makes an exception for
applying this decision on loans issued by banks and financing companies. Therefore,
one of the objectives of this thesis is to examine the legality of this exception which
stems from the Ministry's framework on loans and commercial debts.
Banks give two types of loans, personal and commercial. What is the difference
between commercial bank loan and personal bank loan? Does the law differentiate
between the two? Does Article 80 from Oman Commercial Law apply to both types?
What is the stance of the Omani judiciary in this regard? The thesis further examines
the legality of loans in Oman Civil Transactions Law and Oman Commercial Law, to
reach to a finding that it is indeed lawful in the former and is only lawful for
commercial loans only in the latter.
In light of the above, this thesis has three chapters, the first of which is
introductory, focusing on the concept of interest and its historical development. The
second chapter discusses the legislative regulation of interest in Omani laws. The final
chapter is dedicated on examining the legality of personal loans and the related
judiciary applications.
The thesis further concludes several important recommendations including the
need to add a legal article similar to Article 410 in the United Arab Emirates' Commercial
Transactions Law, which stipulates that "a bank loan is considered a commercial activity
irrespective of the capacity of the borrower or the purpose for which the loan is
allocated". This way guarantees that the legal foundation of bank loans interest for
personal and commercial are identical.
