| Islamic Finance News (IFN) Oman Seminar & Dialogue - Muscat, Oman | https://cbo.gov.om/speech/7 | 3/7/2016 8:00:00 PM | Islamic Finance News (IFN) Oman Seminar & Dialogue - Muscat, Oman | At the outset let me congratulate, Islamic Finance News of Red Money Group in organizing this event in Oman. Let me also felicitate the distinguished speakers and panelists, besides participants/attendants from a wide spectrum. The event, I observe, is very appropriately structured with the Seminar in the morning focusing "Islamic Finance Today and Role Oman is Playing"" and a closed door Dialogue in the afternoon on exchanges of the benefits and concerns facing Sharia' Compliant financing and investment market today. Islamic banking has assumed important role in the banking sector in many countries. There has been Islamic banking solely operating in some countries and some have dual system. Various performance indicators reveal rising business under Islamic Banking in many jurisdictions. Oman is no exception. It goes to the credit of Islamic Banking segment in Oman that in a short span of about three years and in spite of teething problems, they reached RO 2,254 million in gross assets with a market share of 7.45%, as of December 2015. Gross finance was at RO 1,781 million, market share being 8.86%. To briefly touch upon the introduction of Islamic Banking in Oman it may be noted that His Majesty, in May 2011, by Royal Order approved the authorization of Islamic Banking through full-fledged banks and Islamic Banking Windows. Pursuant to the above, Banking Law was amended in December 2012 through Royal Decree 69/2012 by providing formal and enabling provisions followed up by issue of comprehensive Islamic Banking Regulatory Framework. Two full-fledged Islamic Banks and six Islamic Banking Windows have been established and number of operating branches is now 60 - significant indeed. Eight more are in the process of being established.The Sultanate, being a late entrant, immensely benefitted by experience elsewhere. The hallmarks of our approach have been adopting of accounting standards of AAOIFI and guidance by IFSB Standards at the beginning itself. Basel norms and other accredited inputs for robust functioning of banks and effective supervision are of guidance to the extent they are not incompatible with Islamic Banking. In order to ensure Sharia' compliance, in reality and perception, independent Sharia' Supervisory Boards in Islamic Banks/Windows, supports in terms of Internal Sharia' Review with audit and control wings, internal Sharia' audit and independent external Sharia' audit, segregation of Windows from banks etc. have been provided for.Much emphasis has been made in training of staff, creating awareness among the and disclosures. Central Bank of Oman (CBO) has been receiving representations from Islamic Banking Entities and they are being looked into with the objective of removing obstacles without sacrificing the need to dilute rigours of Islamic finance and prudence. CBO is guided by it's High Sharia' Supervisory Authority as and when necessary.CBO has conceded certain regulatory relaxations. These have assisted Islamic Banking Entities in business. At the same, limited as they have been, IBEs have been forced to penetrate into business finance more and more, deemed to be difficult initially.Our emphasis has been healthy and compliant growth of Islamic Banking in Oman.Series of Sukuk issued, simultaneous development of Takafulbusiness etc. are positive signals for all-round development of Sharia' compliant business in Oman. Both the Seminar and Dialogue are going to have positive and prospective coverage in the sense they are going to look at where we are, what the challenges are and how to address them.Apart from issues on convergence of Sharia' interpretations and liquidity issues, in the current context of changed economic environment, subjects like preserving scarce resources to be used optimally, potential for prolonged liquidity tightness to give rise to larger stability issues, scope for Sukuk and large scale financing to fund and enable private sector to play a larger role in economic diversification, moving away from undue real estate orientation, greater thrust on financial inclusion, SME finance and empowerment of women, meeting challenges arising from need to meet on-going refinements of Basel on capital, liquidity, stable funding and other norms can be taken up in this diverse gathering. I look forward to fruitful discussions and suggestions arising from this event. I wish the event all success accordingly. | | |