Taking advantage of its late initiation into Islamic banking, Oman will offer a unique model for the sector, which will be a combination of different models available across the world, according to Central Bank of Oman (CBO).
H E Hamood Sangour al Zadjali, executive president of CBO, told Muscat Daily on the sidelines of the Oman Islamic Economic Forum on Saturday, that Oman's Islamic banking model will be a combination of the best available models across the world rather than a copy of any single one.
"Considering the local environment we expect to create an exemplary and unique Islamic banking model. We would include suitable elements from all the different models available. We have hired consultants and they are working on it."
The two-day forum kicked off under the auspices of H H Sayyid Shihab bin Tariq al Said in the presence of Tun Abdullah bin Haji Ahmad Badawi, former prime minister of Malaysia.
H E Zadjali said that CBO is preparing the necessary rules and regulations for Islamic banking which are expected to be ready by the end of the first quarter of 2012.
However, it was not confirmed when banks will be able to start offering Islamic banking services in Oman. "The existing banking law also needs to be amended, and the process is on, but a timeline cannot be given as of now.
Once the law is amended then rules and regulations will be issued to banks with clear guidelines. Apart from two full- fledged Islamic banks, most of the commercial banks will be interested in opening Islamic windows, but they have to meet the criteria and regulations set by the central bank. Banks are making the necessary preparations.
"When we are certain that banks are well prepared and in line with regulations, we will provide them licences," H E Zadjali added.
Speaking on Malaysia's successful experience with Islamic banking and finance, Badawi said that the concept is still evolving and allowing existing financial institutions to offer Islamic banking windows along with the full- fledged institutions is a right decision.
"The Malaysian central bank took the decision to allow institutions to open Islamic windows using existing infrastructure. This idea was seen as most effective in increasing the number of institutions offering Islamic banking services at the lowest cost and in the shortest time frame.
"All countries that allow Islamic banking must have a global standard for the sector, otherwise it will not emerge as an alternative to the traditional banking system," Badawi added.
© Muscat Daily 2011
