The Central Bank of Oman (CBO) organised a seminar on Islamic banking in collaboration with Ernst & Young, Bahrain.
Speakers at the seminar stressed that the growth prospects for the banking sector would increase by 20 per cent over the next decade, especially since the Islamic banking system was less affected by the recent global financial crisis compared to conventional banks.
Regarding the development of the Omani market in this field, experts noted the need to provide the necessary expertise in Islamic banking to groom Omani institutions operating in banking and finance and to provide appropriate training in order to keep them abreast of the developments taking place in this sector.
The seminar was attended by a large number of chief executives and officials of commercial banks operating in the Sultanate. It may be noted that the CBO board of governors has decided to establish Islamic banks in the country.
This event, the first of its kind to be organised by the CBO, came about following the issuance of the Royal Decree by His Majesty the Sultan to establish Islamic banks in the Sultanate, and to allow existing banks the opportunity to open windows in dealing with Islamic banking.
The seminar addressed the regulatory and organisational aspects of Islamic banking business.
As well as the conditions and requirements of the Islamic banking system, and the need for the Omani banking sector to accommodate these conditions and adapt to the expected change. It also discussed the developments in the banking and financial sector in the Islamic world, from the mid-seventies till date. Recent statistical data indicate that the total value of Islamic assets stood at about $1 trillion.
The potential and resultant opportunities of such development for banking institutions operating in the Sultanate were also discussed, while the expected challenges of this transformation in the history of banking in Oman during the next phase were explored.
Participants also stressed the need for ways and means to create awareness and educate people in the Sultanate on the applicable rules and regulations in effect in the Islamic banking system and specific to its operation.
They pointed out the importance of training cadres at the CBO and the banking and financial institutions operating in the Sultanate to be able to bridge the possible lack of knowledge and familiarity gap in Islamic banking. Speakers also emphasised the need to provide the necessary infrastructure for Islamic banking before venturing into the implementation of the system.