New Oman Banking Law by year-end: CBO

CONRAD PRABHU -

MUSCAT, APRIL 30 -

The Central Bank of Oman (CBO) is drafting a new Banking Law with inbuilt flexibility to take into account current and emerging trends and developments in the banking and financial services industry.

CBO Executive President Tahir bin Salim al Amri (pictured) said the “agile” banking law, which will be underpinned by “dynamic” bylaws, is likely to be issued before the end of this year.

Al Amri made the announcement in a keynote address at the opening of the New Age Banking Summit Oman organised by OER with the support of Oman Banks Association. The event, held at Sheraton Oman Hotel, was co-located with the Oman Banking & Finance Awards.

Earlier, the Executive President underlined the “robust health and consistent performance” of commercial banks in the Sultanate. Credit growth year-on-year was up 6.42 per cent in 2018, while deposits grew 7.8 per cent, he said. In value terms, credit was around RO 25 billion, against deposits of around RO 23 billion.

Non-performing loans (NPLs) also continued to be low, with Gross NPLs pegged at 2.73 per cent last year, while Net NPLs were at 0.92 per cent, the Executive President said.

Underscoring the strength and resiliency of the banking industry, the Capital Adequacy Ratio of banks stood at 18.4 per cent while the Tier-1 Capital Ratio posted 17.1 per cent.

Oman’s banking sector, the official noted, was characterised by comfortable compliance with prudential requirements, adequate lending capacity with low lending ratio, comfortable liquidity indicators, and a stable working environment.

Bank credit relative to GDP stood at 84.3 per cent as of December 2017, said Al Amri. Financial support for SMEs and Omani entrepreneurs also averaged about 3.5 per cent. Furthermore, banks continue to provide lending to large projects, infrastructure schemes, tourism, and imports, he said.

Efforts to strengthen digital banking in the Sultanate were continuing apace, the Executive President said. A new Payment Systems Law was issued in 2018, with the bylaws due to be introduced soon — initiatives that will provide for a strong electronics payments and electronic settlements framework, he said.

Al Amri also reiterated the Central Bank’s advocacy of financial inclusive designed to ensure that unbanked individuals, regardless of their geographical location in the Sultanate, have access to banking services.

In this regard, banks have been encouraged to either set up branches in underserved areas or provide services digitally so that “everybody is included in the financial sector”, he said, adding: “If you have people on the financial transactions map, commerce will grow and they will prosper.”