Need to strengthen Islamic banking sector in Oman
Published: 03:12 PM,Dec 14,2022 | EDITED : 07:12 PM,Dec 14,2022
The Islamic banking sector in the region has grown significantly since it was launched in the early seventies of the last century, to become today a competitor to traditional banks and other banking and financial institutions. Islamic banks were launched in the Sultanate of Oman twelve years ago, and it was the last Gulf country in this regard, but today it occupies a prominent place in daily banking operations. It also increased the confidence of many people in this sector, despite the limited number of products that it provides at the present time.
The share of Islamic banking institutions in Oman today amounted to 16.2% of total assets at the end of the third quarter of this year, according to the data of the Central Bank of Oman, while the market share of the sector in total financing amounted to about 18.9%, and its share of total deposits was about 18.1%.
During the activities of the first session of the Islamic Banking and Finance Forum 2022, which was held recently, Tahir bin Salem al Amri, the Executive President of the Central Bank of Oman, revealed that the Central Bank is in the process of launching liquidity tools that are compatible with Islamic, which will meet the needs of customers, explaining that the Supreme Supervisory Authority Sharia has recently reviewed and approved the contract structures for these products that will be offered by Islamic banks and windows.
The Central Bank is also working on preparing a roadmap for the windows of traditional banks to convert them into integrated Islamic banks taking into account all the regulatory requirements. on a larger scale.
This sector has begun to give more attention to small and medium-sized companies and their employees, and to strengthen their operations in productive sectors such as agriculture and provide services to the logistical sectors that are growing significantly, which gives them the ability to compete, and enhances the benefits of customers and shareholders. Converting the banking windows of traditional banks into full Islamic banks will create great competition with the current banks, at a time when there are only two Islamic banks in the Sultanate, while they will be acquired by a traditional bank, which is not approved by the Omani public, at a time when The Central Bank focuses on supporting the Islamic banking sector. There are several main axes that include maintaining the growth of Islamic banking activity, enhancing financial stability, expanding financial inclusion, building capabilities and developing talents, and promoting and spreading banking awareness, which requires continuous efforts by those in charge to communicate the idea of Islamic banking. The aim is how to deal with the sector, first and foremost the participation of community members and institutions in the development of community businesses in a positive way without carrying and introducing them into financial difficulties and challenges as happens with traditional banking institutions.
The Islamic banking sector needs to strengthen legislation to adopt best practices in order to be able to expand with Islamic products that also require protection from the concerned authorities and enhance transparency, so that the legislation regulating banks will distinguish what Islamic banks do as distinct from what conventional banks do.
The share of Islamic banking institutions in Oman today amounted to 16.2% of total assets at the end of the third quarter of this year, according to the data of the Central Bank of Oman, while the market share of the sector in total financing amounted to about 18.9%, and its share of total deposits was about 18.1%.
During the activities of the first session of the Islamic Banking and Finance Forum 2022, which was held recently, Tahir bin Salem al Amri, the Executive President of the Central Bank of Oman, revealed that the Central Bank is in the process of launching liquidity tools that are compatible with Islamic, which will meet the needs of customers, explaining that the Supreme Supervisory Authority Sharia has recently reviewed and approved the contract structures for these products that will be offered by Islamic banks and windows.
The Central Bank is also working on preparing a roadmap for the windows of traditional banks to convert them into integrated Islamic banks taking into account all the regulatory requirements. on a larger scale.
This sector has begun to give more attention to small and medium-sized companies and their employees, and to strengthen their operations in productive sectors such as agriculture and provide services to the logistical sectors that are growing significantly, which gives them the ability to compete, and enhances the benefits of customers and shareholders. Converting the banking windows of traditional banks into full Islamic banks will create great competition with the current banks, at a time when there are only two Islamic banks in the Sultanate, while they will be acquired by a traditional bank, which is not approved by the Omani public, at a time when The Central Bank focuses on supporting the Islamic banking sector. There are several main axes that include maintaining the growth of Islamic banking activity, enhancing financial stability, expanding financial inclusion, building capabilities and developing talents, and promoting and spreading banking awareness, which requires continuous efforts by those in charge to communicate the idea of Islamic banking. The aim is how to deal with the sector, first and foremost the participation of community members and institutions in the development of community businesses in a positive way without carrying and introducing them into financial difficulties and challenges as happens with traditional banking institutions.
The Islamic banking sector needs to strengthen legislation to adopt best practices in order to be able to expand with Islamic products that also require protection from the concerned authorities and enhance transparency, so that the legislation regulating banks will distinguish what Islamic banks do as distinct from what conventional banks do.