Oman introduces sweeping banking reforms to meet digital innovation

Oman’s Sultanate has introduced major reforms to its banking sector, aimed at modernising the financial system and boosting economic growth, local media reported.

Royal Decrees related to the formation of a new board of Central Bank of Oman and appointment of its governor has been issued for the reforms, which include the formation of a new board of the Central Bank of Oman (CBO) and the appointment of its governor, are designed to enhance the legal and regulatory framework of the banking sector.

The new banking law, which consists of 241 articles, provides a comprehensive framework for the regulation of banking activities in Oman. The law is divided into several chapters, with the first chapter providing definitions and general rules for the banking sector. The second chapter deals with the responsibilities and work mechanisms of the CBO, including monetary policy and cash management.

The law also regulates various aspects of banking activities, including the issuance of national currency, preservation of currency value, and supervision of licensed financial and banking activities. Furthermore, the law emphasizes the protection of customer rights, including confidentiality and fair treatment.

In addition, the law provides a framework for Islamic banking practices, including licensing, risk management, and Shari’ah governance. The reforms also introduce new concepts such as digital banks and financial technology, providing a framework for the regulation of these activities.

The law on protection of banking deposits was issued prior to the new law and system, by Royal Decree No. 47/2024. Overall, the reforms aim to strengthen the banking sector in Oman, promote economic growth, and enhance the country’s competitiveness in the global financial market.