National Bank of Oman (NBO) has mandated four banks for a capital-boosting bond, of up to $300 million, which it plans to issue after the summer, banking sources said.

The sultanate's third-largest bank by assets will join a clutch of Gulf lenders considering raising funds through capital instruments to sustain strong growth, diversify sources of funding and prepare for the new Basel III banking rules.

Omani banks are also affected by the plunge in oil prices which has put public finances under pressure, increasing the responsibility of the banking system to shoulder the burden of funding infrastructure spending and wider economic growth in the absence of government cash.

NBO picked Citigroup, Credit Agricole, National Bank of Abu Dhabi and Standard Chartered to arrange investor roadshows ahead of the potential issue, two sources said, speaking on condition of anonymity as the information is not public.

NBO did not immediately respond to a request for comment.

The US dollar-denominated bond would boost the bank's Tier 1 (core) capital. Earlier this month, shareholders of the bank approved the issuance of a Tier 1 instrument of up to $300 million.

The bank is expected to wait until at least September before issuing, as bond markets in the Gulf have become less active with the approach of the Muslim holy month of Ramadan, which starts on Thursday, and the summer break in August.

NBO's capital adequacy ratio, a combination of Tier 1 and Tier 2 (supplementary) capital, stood at 14.1 percent at the end of March, ahead of the regulatory minimum requirement of 12.625 percent, according to its financial statements.

It would be only the second Omani lender to issue a Tier 1 bond, after Bank Dhofar sold such an instrument in May worth $300 million.

In general, banks in the sultanate are boosting capital and funding -- Bank Sohar is also in the process of raising a debut $250 million syndicated loan.

Oman's government swung to a 544.6 million rial ($1.4 billion) budget deficit in the first quarter compared to a 215.4 million rial surplus in the same three months of 2014.

It has responded to low oil prices by cutting spending on defence and subsidies, but efforts to diversify the economy are still being prioritised.

Oman also plans to sell its first sovereign Islamic bond, an issue of 200 million rials ($520 million) of sukuk, through a private placement this year.-Reuters