Bank Nizwa, Oman's first dedicated Islamic bank, will offer an entire portfolio of commercial banking services
Bank Nizwa has recently launched its brand-mark moving towards the establishment of the first Islamic bank within the country. The bank will be Oman's first dedicated Islamic bank, and all products and services offered will be Shari'a-compliant. Bank Nizwa will eventually offer an entire portfolio of commercial banking services, in accordance with the license to be issued by the Central Bank of Oman (CBO) and the Banking Law promulgated by the Royal Decree No. 114/2000. Further, the CBO will soon be issuing an Islamic Banking Regulatory Framework (IBRF) for Oman and Bank Nizwa will operate in accordance with this IBRF once it comes into force.
The formation of Bank Nizwa came about with the CBO granting its initial approval to the licensing of the bank to Sheikh Saud bin Ali Al Khalili. Sheikh Saud along with 91 other founder shareholders appointed a founding committee to represent them, and to help manage the establishment of the bank as a licensed Shari'a-compliant commercial bank. The founding committee consists of five individuals including the chairman of the founding committee, Ahmed bin Saif Al-Rawahi. The founding committee of the bank, together with its appointed consultants, is undertaking the development of an operating model for the bank, the procurement of the IT infrastructure to support the bank's products and back-office functions, and the creation of the internal polices and procedures required for the opening and operation of the bank. Key members of the senior management team have been identified and some of them were formally appointed. Bank Nizwa is also in the process of obtaining approval for setting up its head office and the first three branches to be located in Muscat , Nizwa and Sohar.
'We have undertaken a detailed feasibility study for establishing the bank and have drawn up a business plan in conjunction with an internationally reputed consultancy firm. The study reveals that there is substantial unmet demand for Shari'a-compliant products in Oman. This together with the attractive economic fundamentals of Oman and the growth in the Omani banking market, highlights the growth opportunity for Bank Nizwa,' said Ahmed Al-Rawahi.
The market for Islamic finance has grown rapidly over the last few years with the global value of Shari'a-compliant assets reaching an estimated value of $1tn in 2010. Customers across the globe have shown an increasing propensity to adopt Islamic banking as their preferred mode of financing as faith-based attitudes coupled with viable options from Islamic banking have reinforced greater adherence to Shari'a in economic matters.
© Oman Economic Review 2012
