Oman has started implementing stress tests in its banking sector to limit the impact of the euro zone crisis and a feared global recession, a senior central bank official said on Sunday.

"Some banks are already doing their stress scenarios and the central bank is also conducting  stress tests in the banking system," Abdulrahman Ibrahim al-Balushi, senior manager at the Banking Examination Department of Oman's Central Bank, told Reuters.

"Directly or indirectly there will be some impact in our region from the euro zone crisis. So we will tell the banks to catch up with whatever is happening on a global scale."

Balushi said there was no specific time frame or deadline for the implementation of the stress tests for banks.

"We are encouraging the banks to continuously do it and not just for a specific amount of time," he said on the sidelines of an Arab Monetary Fund meeting on banking supervision in the capital of the United Arab Emirates.

Balushi also said that Oman would not need to adopt any new liquidity measures currently.

"As far as liquidity is concerned, there is not any change because we are not amongst those countries which face liquidity issues... Our overseas exposure is very limited. The local market is highly liquid and we don't have any problems in this regard."

Gulf states should be largely unaffected by the euro zone debt crisis as their banks have minimal exposure to the bloc's debt, the head of Oman's central bank said in November.

Analysts polled by Reuters in September expect the sultanate's economy to expand by 4.0 percent this year and 4.2 percent in 2012, helped by the government's increased infrastructure spending, after estimated 4.2 percent growth in 2010.

Loans and deposits are expected to grow in Oman's banking system in 2012, Balushi said.

"We're focusing on credit risk, this is the major challenge," he added.

Total credit in the small non-Opec oil producer grew by 12.8 per cent year-on-year at the end of August, after 13.1 per cent in the previous month, central bank data showed.

Rating agency Standard & Poors (S&P) revised its Bicra (Banking Industry Country Risk Assessment) methodology and affirmed its score on Qatar at 4, but changed the BICRA score on Kuwait and Oman from 5 to 4, Saudi Arabia from 3 to 2, UAE from 4 to 5 and Bahrain from 5 to 6.

A Bicra is scored on a scale from 1 to 10, ranging from the lowest-risk banking systems (group 1) to the highest-risk (group 10). – Reuters