Wednesday 09th, December 2015
MUSCAT: Hamood bin Sanjour al Zedjali, Executive President of the Central Bank of Oman (CBO) affirmed that all banking institutions in the Sultanate are in sound financial positions in line with international standards. He pointed out that the Omani banking sector today has 16 commercial banks, of which seven are local and nine are the branches of foreign banks, alongside two government specialised banks, "Oman Housing Bank" and "Oman Development Bank," as well as two Islamic banks and six Islamic windows affiliated with local commercial banks. In his foreword to the latest issue of "Al Markazi" magazine, a publication of the CBO, Al Zedjali addressed the likely question on some people's minds if there is any need to establish new banks in the Omani society in view of the current global changes.
He affirmed that the current number of banking units, whether local commercial banks, branches of foreign banks or Islamic Windows, is considered sufficient, and proportionate to the size of the Omani economy. He also explained that these institutions can mobilise national savings and meet the banking needs of various economic activities in the country, adding that banks in the Sultanate are flexible enough to deal with various economic changes, certainly including the decline in oil prices in the world markets. In addition, Al Zedjali pointed out that the Banking Law of 2000 and the regulatory framework for Islamic banking issued in 2012, as well as the circulars issued by the CBO when necessary have been drafted keeping in view all the developments in the banking industry at the local and regional level, conforming to the global trends, commensurating with the nature and the characteristics of the Omani economy and fitting well with the banking and investment activities in the country, which remain under tight vigil and supervision of the CBO.
He explained that the Omani banking sector is fit enough to deal with various economic changes and can absorb the repercussions that are being witnessed in the international arena at present. The CBO Executive President also made reference to the many challenges facing the banking sector, to which the banking sector must be aware and vigilant in order to maintain the financial and banking information security and confidentiality. Thus, information should not be disclosed to unauthorised persons and the integrity of information should be preserved during the transition from a specific point to another.
Information should also be available when needed, especially in the case of emergencies and natural disasters, protected from the risk of piracy and financial crimes that are prevalent globally and stored in secure information centres. Al Zedjali affirmed that to this effect, the CBO has developed a strategy to promote the exchange of information with the banks operating in the Sultanate, the Telecommunications Regulatory Authority (TRA) and the Economic Crimes Unit of the Royal Oman Police (ROP), and enhance cooperation and coordination with these institutions.
Circulars are issued periodically instructing banks to monitor suspicious financial transactions and report them as part of the fight against money laundering and terrorist financing. He added that all electronic banking services are subject to prior approval by the CBO before they are launched while banks undertake testing of these new banking services in a phased and gradual manner to verify their integrity and suitability before offering them to customers. Omani banks also insure their electronic operations with insurance companies as an additional protection for banks against the risks of cybercrimes.
The CBO Executive President concluded in his Foreword that in order to enhance the comprehensive supervision over the banking sector and ensure the provision of the required level of information security in banks, the CBO, together with the commercial banks, has allocated sufficient funds to install modern technical systems and attract qualified personnel through providing training opportunities constantly for their staff to keep up with the new developments in these areas.
Awareness is also spread among bank customers and the public by conducting educational programmes explaining the potential risks of fraud and electronic hacking and piracy, as well as recommending the precautionary procedures for information security and providing information on avoiding any negative effects and dangers that may weaken the demand for electronic banking services. He asserted that due to the implementation of these precautions and facilities, it is expected that the banking sector will continue to grow in the future without any obstacles, which is of great importance in achieving development and economic diversification, as well as in providing more job opportunities for the growing number of young Omani job-seekers.
© Oman Daily Observer 2015