Jun 21 2011
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Early starters to make most of Islamic banking in Oman
"If banks are to make the most of the new opportunity then they should be in hurry to get into the sector. Early comers in the industry will get a foothold in the market and will have a head start as far as marketing of Islamic finance products are concerned," said Dr Mabid Ali al Jarhi, financial expert and head of training at Emirates Islamic Bank in Dubai.
Dr Jarhi is also president of International Association of Islamic Economics and a member on the Sharia board of the Dubai Financial Market.
Dr Jarhi said that Oman should choose its Islamic banking model carefully and with some changes to the Gulf Islamic banking model. "As a late starter there is an advantage that Oman can easily avoid the mistakes of the Malaysian and Gulf Islamic banking models. If the regulatory environment is favorable to Islamic banking, the market in Oman could operate at levels that could compete with regional institutions. The Central Bank of Oman (CBO) should look at amending its existing laws, or preparing a new draft banking law to put Islamic banks on an equal footing with conventional banks."
Islamic banking windows is in separating funds for Islamic and conventional banking. Banks will have to ensure that separate financial statements are published to fully comply with Sharia laws."
Haitham Hani Abdou, marketing director of ITS, said that a start-up full-fledged Islamic bank will capture significant market share compared to conventional banks offering Islamic products. "There is going to be good demand for Islamic finance products and services in the beginning. I believe early movers will have a good advantage."
"Islamic banking window is a challenge for the banks in the beginning as maintaining two systems within a bank is quite challenging," Abdou added.
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