Emirates NBD (ENBD), Dubai's largest bank, and Commercial Bank of Dubai (CBD) are both talking to banks to raise a combined total of up to $1.7 billion in loans to refinance existing debt, sources close to the matter said.

They are the latest lenders striving to raise funds from the market as liquidity comes under pressure from lower oil prices. The banking system has been hit by governments withdrawing deposits to cover budget shortfalls, while borrowing costs have risen as investors price regional debt higher.

One of the sources said the banks were keen to raise funds before a possible further rise in borrowing costs later in the year if the U.S. Federal Reserve hiked interest rates again.

ENBD is talking to banks about raising a three-year loan, the sources told Reuters on Wednesday. The final amount was not yet determined but could be up to $1.2 billion, one said.

The funds would refinance an existing $800 million loan that matures in December, the sources said.

ENBD secured the loan in December 2013 with a pricing of 140 basis points over the London Interbank Offered Rate (Libor), according to Thomson Reuters data.

CBD was looking to refinance a $450 million loan that matures in December, the sources added. The three year loan had a pricing of 125 basis points over Libor, according to Thomson Reuters data.

The bank was considering raising the amount to $500 million over a three year period, the sources said.

ENBD and CBD declined to comment.

Citing banking sources, Reuters reported on Monday that Qatar's Ahli Bank had started talks to raise a $250 million three-year loan to refinance an existing $200 million facility it signed in September 2014 and is due to mature next year.-Reuters