Islamic Banking Industry in Oman
The first start of the Islamic banking in the Sultanate of Oman was in 2012 under the Royal Decree No. (69/2012) which stipulates the issuance of amendments to some provisions of the banking law which allows the provision of Islamic banking transactions in the Sultanate; and since then business started, both by exclusive Islamic banks such as Bank Nizwa and Alizz Islamic Bank, and by Islamic windows belonging to various traditional banks operating in the Sultanate.
The start of the Islamic banks and windows combined in the Sultanate was with a capital of 450 million RO, including: 150 million RO the capital of Bank Nizwa, and the Islamic window Mithaaq that belongs to Bank Muscat was 150 million RO. The capital of Alizz Islamic Bank is 100 million RO. National Bank of Oman (NBO) has announced the launch of its window of Islamic banking “Muzn” with a capital of RO 15 million. Al-Ahli Bank has established its own platform “Al Hilal Islamic Banking”. Bank Sohar has also announced the allocation of RO 10 million to its Islamic banking network “Sohar Islamic Bank”.
Despite the fact that Islamic banking started late in the Sultanate as the last Gulf country, but according to experts and to the website of the Union of Arab Banks in that period, it is expected that the success of the Sultanate’s experience will be great due to the availability of many success’ elements , especially that the Sultanate wanted to start where the others have ended, avoiding mistakes and failures of this industry in the period of its development during the last four decades; and the regulatory and supervisory framework for Islamic banking, which was issued pursuant to Article 122, has come as a coronation to this vision.
Islamic banking is still making a lot of success both locally and globally. Islamic banking assets have grown significantly globally .
Locally, the latest data issued by the Central Bank indicate a remarkable growth in the assets of Islamic banking in the Sultanate due to the acceptance it enjoyed by the society and the financing alternatives it provides to serve all segments in the society and meet their requirements. The latest bulletin issued by the Central Bank of Oman in February 2019 Indicates a total assets growth of banks and windows together that reached RO 4.5 billion, bringing the total Islamic banking assets to 13.3% which is a remarkable growth due to the expansion of their market share.