Oman gears up for Islamic finance

Executive President of the Sultanate of Oman predicts rapid growth for Islamic finance in the Sultanate as the Central Bank develops rules and regulations HE Hamoud Bin Sangour Al Zadjali, Executive President of the Central Bank of Oman, was speaking at the Oman Islamic Economic Forum, which took place in Muscat on 17 and 18 December. He said, “These banks need to follow assorted accounting standards in certain cases that are acceptable by the parties who are trading in the stock markets and are in line with international standards. The Central Bank of Oman will review regulatory issues at the legislations which came into force in the first quarter of 2011 and will revise the legislations from time to time based on the developments at the local and world markets. He added that these banks are not isolated from traditional banks and that the Central Bank, the regulator of the banking sector, will keep a link between Islamic banks and other banks. However, he said that it will be a real challenge now and in future. Also present was Dr. Abdul Aziz Mohammed al-Hinai, Deputy Chairman of the Islamic Bank for Development, who agreed and said that Islamic banks, which have achieved great success since their launch, are currently facing many challenges, the most notable of which are developing the relationships among Islamic banks, central banks and regulatory bodies to create a proper supervisory system for the Islamic financial industry. Tun Abudllah Bin Haji Ahmed Badawi, former prime minister of Malaysia, said in his keynote address that there is a need for global standards in Islamic banking and finance to help it emerge as an international alternative in the sector. Sheikh Dr. Kahlan bin Nabhan al-Kharousi, Assistant of the Sultanate's Grand Mufti, said that the Sultanate seeks to benefit from the experience of some Islamic countries in the field of Islamic banks to avoid the shortcomings of the Islamic banks’ experiences, as well as the shortcomings of the financial and Takaful insurance companies that provide Shari’ah-compliant products. Khalid Bin Hilal Al Yahmadi, Chairman of Amjad Development Company, said that studies conducted found that principles of transactions in the Islamic economy provide satisfactory and fair solutions for the society. He said, “More than OMR 2 billion ($5 billion) in the Sultanate are semi-frozen money or interest-free deposits. This amount accounts for one-third of the total deposits at local banks. One of the studies affirmed that two-thirds of Omani society prefers to deal with financial solutions that are Shari’ah-compliant.” The forum consisted of sessions which discussed topics such as: Competing Islamic Banking Regulatory Models: Which one is the Best for Oman; Islamic Banking as Practices by Fully-fledged Banks; Structuring of Islamic Finance Products; and Shari’ah Issues in Islamic Banking and Finance. http://cpifinancial.net