Central Bank of Oman regulates Islamic banking sector through regulations, instructions and guidelines which are issued through various circulars and circular letters.
REGULATIONS ON ISLAMIC BANKING
Regulation on Establishing and Organizing the High Shari'ah Supervisory Authority (HSSA) in the Central Bank of Oman (BM/REG/54/12/2013) was issued vide Circular BM 1118 dated February 25, 2014. This regulation stipulates functions, membership, fit & proper criteria and other matters related to the operations of HSSA.
Regulation on Islamic Banking Business (BM/REG/56/4/2019), issued vide Circular IB 8 dated January 10, 2020, offers updated requirements related to licensing for conducting Islamic banking business, Shari'ah governance, the charity account as well as accounting standards, external audit and disclosures.
INSTRUCTIONS AND GUIDELINES
Islamic Banking Regulatory Framework (IBRF), issued vide Circular IB 1 dated December 18, 2012, stipulates detailed requirements and guidelines on a range of topics, some of which are adopted from standards issued by international standard setting bodies Islamic Financial Services Board (IFSB), Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) and other best practices.
The IBRF provides detailed instructions on licensing requirements and process for new full-fledged Islamic banks and Islamic windows of conventional banks. This section also offers “essential Shari'ah requirements" of most commonly used Islamic banking contracts such as Murabahah, Musawamah, Mudarabah, Musharakah, diminishing Musharakah, Salam, Istisna', Ijarah and Sukuk.
The requirements in “general obligations" section cover, among others, subjects of systems and controls, conduct of business, corporate governance, disclosure requirements.
Shari'ah governance requirements in IBRF outline the formulation, membership and operational requirements of Shari'ah supervisory boards of individual Islamic banking entities. In addition, instructions are provided on qualifications and appointment of Internal Shari'ah Reviewer as well as the role and operations of Shari'ah compliant unit and Shari'ah audit unit. Fit and proper criteria for the staff of each Shari'ah department are also defined.
It is also required that licensees engage an independent third party to conduct an annual external independent Shari'ah audit. The purpose of this audit is to add credibility to the internal Shari'ah audit of the licensees through an independent endorsement and to enhance public confidence in the Shari'ah legitimacy of the products and services. Independent Shari'ah auditor shall submit its report to the Board of Directors of the licensee as well as the Central Bank, with a copy to the its Shari'ah supervisory board and management.
On accounting standards, Islamic windows are required to maintain separate books of accounts. Books of accounts must comply with the Financial Accounting Standards issued by the AAOIFI, and in their absence, with International Financial Reporting Standards (“IFRS") / International Accounting Standards (“IAS").
The IBRF also stipulates detailed guidelines on capital adequacy and risk management requirements for major Islamic banking products as well as the calculation and measurement of credit risk, market risk, operational risk and liquidity risk.
Read 
Regulation Establishing High Shari'ah Supervisory Authority (English)
Read Regulation on Islamic Banking Business (Unofficial English Translation)
Read Islamic
Banking Regulatory Framework (English)
Read Islamic Banking Related Circulars
2012:
2013:
2014:
2020:
2022: