Oman’s New Banking Law
The banking sector in Oman is favorable, and there has been a significant economic growth in the regulations in the Sultanate. The recently introduced policies and directives indicate that Oman’s banking industry desires to work on the same lines as that of the industry best practices as well as protection of consumer rights. Banks in the Sultanate have witnessed a heavy increase in the revenue margins, and it continues to grow. This is a step forward to innovate and utilize this environment to fill in the gaps in the sector to refine the efficiency in the operations.
The Central Bank of Oman (“CBO”) is in the process of drafting a new banking law which will act as an added advantage to the emerging developments in Oman’s banking and financial sector. The Executive President of CBO termed this initiative as an “agile” law, which will encourage new age banking avenues such as electronic payments.
The law which will be implemented by the end of this year was addressed at the New Age Banking Summit in Oman. This summit was organized by the Oman Economic Review (“OER”) together with Oman Banks Association. The Omani Government desired to bring this way forward change in the banking industry.
With the successful implementation of the law, the Banks will continue to loan large investment projects, tourism, infrastructure schemes as well as imports. The by-laws for the new payments system will be introduced soon along with the law.
The new age law will focus more and emphasize on value creation, digital banking and small and medium enterprises (SMEs). The law will ensure the regulatory requirements of the recent developments as well as the future ones.
Taking a look at the statistics, in the year 2018, Oman’s credit growth was up by 6.42% whereas the deposits increased by 7.8%. Calculating in the monetary terms, the credit was valued at OMR 25 billion whereas the deposits were at OMR 23 billion.
This proves to be as evidence to the banking sector in Oman to have been characterized by substantial compliance, enough capacity to loan with decreased ratio and a satisfactory working environment. It is in a healthy state through innovation through digitalization. This ensures to improve the revenue and the offset the regulatory pressure, risks and compliance costs.