Mar 11 2012 |
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First Islamic bank set to open by July
By AFTAB H. KOLA Muscat: Oman's first Islamic bank, Bank Nizwa , would be starting its operations by July-end, while its initial public offering is slated to open for subscription next month, it was announced yesterday.Divulging the plans of Bank Nizwa , Ahmed Saif Al Rawahi, chairman of the Founding Committee, said, "The authorised capital of the bank is RO300 million while the paid up capital is RO150 million. Out of the RO150 million paid-up capital, RO90 million will be invested by the 92 founding members, with the remaining RO60 million to be offered for investing public."
Ahmed, who addressed the media for the first time, said the IPO prospectus is ready and would soon be submitted to the Capital Market Authority (CMA) for approval. He was speaking at a function to unveil a new logo as part of brand positioning for Bank Nizwa .
Bank Nizwa is also in the process of obtaining approval for establishing the first three branches to be located in Muscat, Nizwa and Sohar.
"Over the past months we have been working with our consultants and advisors on implementing the plans. The core banking platform has been identified and sourcing of other IT solutions are being finalised while operational, products, and other policies have been developed," Ahmed said.
"The draft rules issued by Central Bank of Oman (CBO) are good as all stakeholders were invited to offer their comments; from our side there are some minor observations and no major issues. We commend the CBO for their exemplary work," he added.
Talking about the constitution of internal Shariah Board, Ahmed said, "We are in the process of constituting a four-member Shariah Board. Two members would be from the GCC region while the other two from Oman have been identified. It's a fine, healthy balance of scholars and experts from other GCC countries and Oman."
Explaining the findings of a market study on the potential of Islamic banking in the Sultanate, he said one-third of Omanis prefer to stay away from conventional banking, and 30 per cent of the total deposits in Omani banks are lying idle as interest-free deposits.
Yet another major factor that could drive demand for Islamic banking products is that several Omanis carry out their banking transactions in the neighbouring GCC countries due to lack of Islamic banking services in the Sultanate.
Ahmed said that traditional cooperative societies called Jamiyah collect money in interior regions, for disbursing as interest-free loans. However, these are not well-regulated, and cause legal issues. All these factors will drive demand for Islamic banking products in Oman, he noted.
Ahmed urged the authorities to review tax laws in order to make the taxation for Islamic banking more competitive so as to ensure that Islamic products are on par with conventional banking.
Bank Nizwa 's logo consists of a classical Omani gateway, of more compact proportions, containing in its centre a modern yellow square. The square's shadow on the gateway creates a visual twist of a passageway or a 3D cube moving forward in the frontal plane.
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