CBO to issue draft guidelines for digital banks by year-end

MUSCAT, MAY 28

The Central Bank of Oman (CBO) has launched a number of initiatives to help modernize banking services in the Sultanate of Oman.

According to Tahir Salim al Amri, Executive President, several key regulations have been issued over the past two years as part of its “catalytic role” in creating an enabling environment for the growth of a new era of banking in the country.

Delivering the keynote address at the 9th New Age Banking Summit held here on Tuesday, dwelt on some of these initiatives. “The Master Circular on Products and Services has provided greater operational freedom to banks to innovate and offer new products and services. To provide clarity to new and existing players, the Licensing Policy of the Central Bank was issued. So far, we have licensed seven PSPs, three of which have seen significant growth. E-KYC guidelines have been issued to facilitate digital onboarding of customers,” he said.

Further, with a view to providing greater ease of access to short-term small-credits, draft guidelines on the Buy Now Pay Later (BNPL) progamme have been placed for public consultation, said Al Amri.

Yet another landmark initiative spearheaded by the apex bank concerns plans for the authorization of digital banking. “To encourage full-fledged focus on digital offerings, we expect to issue draft guidelines for licensing of digital banks before the end of 2024 for consultation. At the same time not to take the foot off the pedals of risk management and customer protection, Regulatory Frameworks for Financial Consumer Protection and Cyber Security & Resilience have been issued,” he stated.

In his address, Al Amri also underlined the high-tech nature of the Bank’s technology infrastructure. “The National Payments System (NPS), the backbone of the financial system, is robust, safe, reliable, and efficient,” he said. “Our payment infrastructure is not only modern, it also provides a wide array of products for retail and wholesale payments.”

Another key component of the bank’s infrastructure is the wholesale payment system, RTGS, which is currently operating 24/7, enabling all stakeholders to conduct transfers anytime.

“We are in the final lap of linking our RTGS with GCC-RTGS for seamless cross-border payments within the GCC,” he said. “Work is also progressing rapidly for integration with the Arab Regional Payment System (ARPS BUNA). Recent initiatives include guidelines on payment card tokenization for a new, seamless, and easy payment experience, operational and technical enhancements in direct debit services including the introduction of e-mandate, and upgrades to the national instant payment platform (MPCSS) MPCSS system.”

Furthermore, to foster the growth of Fintech, the CBO’s Fintech Regulatory Sandbox has attracted several participants who are currently enrolled in the Sandbox in three different cohorts, namely, Payment Solutions, Blockchain driven Trade Finance and Digital Lending, he said. Crowning these efforts is the recent unveiling of the draft Open Banking Regulatory Framework, which has been issued for public consultation, he added.

The New Age Banking Summit 2024 was co-organized by UMS Group and supported by the Oman Banks Association.