Panel of international Islamic finance experts yesterday said Oman's banking and finance sector can learn from other countries' experiences in Islamic banking, which is a new field here.
At a seminar hosted by Deloitte at the Intercontinental Hotel, the experts gave advice to local members of the finance industry on way of implementing Sharia-compliant banking in the Sultanate. They noted that Oman can use existing models, thus develop the sector quickly. "Oman has a very unique opportunity. It can take lessons from abroad when it takes on Islamic finance within its own borders," said Dawood Ahmedji, from Deloitte's Islamic Finance Knowledge Center (IFKC).
Ahmedji said there are lessons on government support, Sharia confidences, Sharia-compliant products and market education. Instead of starting from scratch, Oman can adapt existing frameworks and policies to suit its needs. The IFKC can help the regulators and banks have a better understanding of Islamic finance, said Alfred Strolla, from Deloitte's Oman offices. "There are a lot of opportunities but there are also challenges and we'd like to bring these challenges into light," Strolla said.
Procedures and guidelines Local challenges include ensuring correct procedures and guidelines implemented by the local banks, he added. Abdullah Salem Al Salmi, executive vice-president of the Capital Market Authority, the market regulator, said it's a mixed blessing that Islamic finance is just being introduced here. "The bad thing is that we have to learn a lot in a very short time, and the good thing is that we're starting from where others have reached," Al Salmi explained. There is a strong and growing demand for Islamic banking in Oman, Al Salmi said, and it has to be introduced so that customers don't have to look outside the Sultanate for their Sharia- compliant banking services.
It will also provide new opportunities for companies to invest here, he added. Hatim Tahir, director of the IFKC, said it will take a few years for Islamic banking to be up and running in Oman, but once it is here, there will be the possibility of more Sharia-compliant investments in the Sultanate. "The Sultanate of Oman has a growing manufacturing industry and has links with other parts of the world, so definitely corporations will see the benefits of Sharia compliance here," Tahir noted. The panel also pushed the importance of having local Sharia scholars involved in Islamic banking and finance here. Knowledge of Sharia is key, because for many customers the religious aspect of Islamic banking is the biggest draw, not the financial benefits, Ahmedji noted. Attendees at the seminar were eager to learn how to implement Islamic banking locally.
Ali Al Lawati, assistant manager at the Central Bank of Oman, said he attended the seminar to gain more knowledge and find out how his institution can develop Islamic banking. "We are here to understand. We want to provide something genuine, not marketing," the Central Bank of Oman official said.