The advent of Islamic banking in the Sultanate of Oman is more recent compared to the Gulf, Asian and European countries where the sector has thrived for a considerably longer time. Today, there are two Islamic banks in the Sultanate of Oman, in addition to a number of Islamic windows opened by conventional banks with independent capital to cover the needs of individuals and customers, and to obtain a share of banking activities in the country. However, Islamic banks today face great competition from their conventional peers, which has led to a decline in the value of their shares in daily trading on the Muscat Stock Exchange. Some shares are sometimes sold for less than its nominal value.
The first Islamic bank, Bank Nizwa, was established in 2015 followed by Alizz Islamic Bank. The history of Islamic banking in the Sultanate Oman dates back to the beginning of the current century, following the issuance of the first Royal Decree in 2012 according to which Islamic banks and windows were exempted from any kind of fees imposed on transactions related to real estate and movable assets. Experts believe that the Islamic banking activity in the country is still in a stage of gradual growth, at a time when they are preparing to offer more products and services that are compatible with the provisions of Islamic law to increase the confidence of customers. Islamic banks are also working to provide several tools for innovative products and other services to attract more investors and customers. These banks need to develop their activities and programmes, and to keep pace with business developments in the local, regional and international arenas.
Today, the Sultanate of Oman is considered as one of the fastest growing countries in these services among all other GCC countries. Those interested in Islamic banking believe that their future bodes well as a result of their success in raising their market share among other banks, developing their assets and diversifying the sources of competencies and their employees, in addition to their success in attracting young customers and investors. These actions undoubtedly lead to creating close relations between Islamic banking, finance and economic sectors to achieve sustainable development goals, while officials are continuing to solve the problems and challenges facing these banks.
Today, there are several institutions working to enhance the role of Islamic banking and enhance awareness of the importance of supporting economic and social development, in addition to activating the role of Sharia governance and strengthening their bodies through modern technology.
From this point of view, these banks are continuing in their activities. Nizwa Bank recently organised a workshop on “Settlement of Islamic Banking Disputes by Conciliation and Arbitration” with the participation of various judicial, governmental and banking bodies, in addition to distinguished judges, employees of conciliation and reconciliation committees. The focus was on how Islamic banks contribute to creating standardised model contracts for Islamic finance, and reducing the differences in practices between banks in such business, which will lead to more coordination between them. Such activities provide participants with the necessary knowledge about the foundations of arbitration in accordance with jurisprudence and law, in addition to their knowledge of the mechanisms of banking dispute settlements and others.
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