DUBAI/LONDON, March 22 (Reuters) - Bank Muscat is speaking to a small group of lenders about raising a loan, sources with knowledge of the matter told Reuters, as Oman's largest lender becomes the latest Gulf bank to seek fresh funds to combat a liquidity squeeze in markets.

Financial institutions in the Gulf have been increasingly approaching the loan and bond markets in recent months for funds, as the lower oil prices environment forces governments to withdraw cash placed on deposit to meet budget shortfalls.

Bank Muscat is negotiating with around 4-5 lenders about raising a loan, according to three sources who spoke on condition of anonymity as the information isn't public.

While details including the size, tenor and pricing of the loan are still to be determined, it was expected to be in the range of $250 million and $300 million and would last for between two and three years.

Bank Muscat declined to comment.

Other lenders currently in the market for finance include Sharjah Islamic Bank , which is seeking a $200 million sharia-compliant loan, and Dubai Islamic Bank , which began meeting fixed income investors on Monday ahead of a potential dollar-denominated sukuk issue.

(Reporting by Tom Arnold and David French in Dubai and Sandrine Bradley in London; Additional Reporting by Fatma Al Arimi in Muscat; Editing by Shri Navaratnam) ((davidj.french@thomsonreuters.com; +971 4 362 5864; Reuters Messaging: davidj.french.thomsonreuters.com@reuters.net))

Keywords: BANK MUSCAT LOANS/