Oman's new strict banking rules
In pursuance to the Royal Decree 69/2012 which amended the Banking Law 2000, the Central Bank of Oman(CBO) has issued its Islamic Banking Regulatory Framework (IBRF). The 519-page document is detailed, comprehensive and sets higher standards for the industry than those in place in several other countries. For example, the CBO has restricted the use of Tawarruq, stating, “Commodity Murabaha or Tawarruq, by whatever name called, is not allowed for the licensees in the sultanate as a general rule."
There are also detailed rules governing Shari’ah boards with criteria set out for scholars on tenures, the maximum number of board seats a scholar may hold and the stipulation that scholars attend a minimum of 75 per cent of board meetings or risk being disqualified.
The IBRF document has been categorised under different titles and covers all issues concerning Islamic banking such as the information on licensing requirements, general obligations and governance, accounting standards and auditor reports, supervision and control, capital adequacy, the credit risks, the market risks, the operational risks, the liquidity risks, etc.
The document stipulates that the accounting standards established by the Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions will be followed.
The Islamic Banking Regulatory Framework (IBRF) document may be viewed on the Central Bank of Oman’s website. Additionally, the Royal Decree No.69/2012 - vide Circular No.BM1099 dated 17.12.2012 may also be located in the intranet portal under Circulars/Banking Circulars.
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