The share of Islamic banking to Oman's economy accounted for 13.4 per cent of the total banking share in Oman at the end of June 2019 while the total assets of Islamic banking institutions operating in the Sultanate increased to RO 4.59 billion in June 2019. This was stated by Dr Qais Issa Mohammed al Yahyai (pictured), Executive Vice President of the Central Bank of Oman, at the 'Eighth Shura Conference for Sharia Audit' being held under the auspices of His Eminence Shaikh Ahmed bin Hamad al Khalili, Grand Mufti of the Sultanate from October 6 to 8.

According to the 2019 Financial Stability Report issued by the Islamic Financial Services Board, Oman's Islamic banking sector is now among the 15 largest Islamic banking sectors in the world by total assets. The profitability of the Islamic banking sector in the Sultanate improved significantly during 2018, achieving a growth rate of more than 76 per cent compared to the previous year, while the total profit exceeded RO 34 million. A number of initiatives being undertaken by the Central Bank of Oman to develop the Islamic banking industry in the Sultanate has played a vital role in such achievements and we are currently undertaking a comprehensive review of the Omani banking law, including the provisions relating to the regulation of Islamic banking and the creation of the legislative environment necessary to enhance its role in the future, Dr Yahyai said.

He added that one of the major steps undertaken by the Authority was finding practical solutions to manage liquidity in Islamic banks and windows and in this regard, the Sharia Supervisory Board of the CBO has approved a few weeks ago a number of Sharia-compliant products and instruments that enhance the overnight lending market and short, medium and long-term investment products to enable licenced institutions to manage their liquidity.

Along with this, we aim to strengthen the role of the Central Bank as a lender of last resort. Internally we are finalising the operational details of these products, and then they will be put on the market. We are working with the concerned authorities to enhance the issuance of Islamic Sukuk in order to expand the available investment base and provide additional investment tools to manage liquidity within Islamic banking institutions. Officials and scholars from International Academy of Sharia Research in Islamic Finance (ISRA), Capital Market Authority, Islamic windows of traditional banks, scientific institutions, research centres, banks and Islamic financial institutions were present at the conference and brainstorming sessions that followed.

Dr Said Bouhraoua, Director of Research, Development and Innovation, and Associate Professor, International Academy for Sharia Research in Islamic Finance, Malaysia, and Abdul Sattar al Qattan, General Manager, Shura for Sharia Consultations who spoke on the subject praised Oman's achievements in Islamic banking. They further said that the Sultanate's hosting of the conference is the biggest evidence that the Sultanate's supervisory authorities attach great importance to this issue, and its keenness to be among the sponsors of Islamic finance in terms of Sharia governance and Sharia audit.

Source: Ministry of Information Sultanate of Oman