Challenges for Islamic Banking in Oman AGENDA q
Challenges for Islamic Banking in Oman
AGENDA q q Strength of Islamic Banking in Oman Legal Reforms Products Development Pioneer of Islamic Banking
Strength of Islamic Banking in Oman Credible Banking Proposition Compliance with International Best Practices Customer Protection CBO’s Objectives Inclusion of Shariah Sensitive Market Segment Efficient Mobilization of Capital Effective Regulatory Oversight
Components of IBRF Licensing Requirements Sharia Governance Framework Window Model • Capital Allocation • Set up/ Policy requirements • SSB / Sharia Reviewer • Fit & Proper criteria • Bank within bank • Direction for business, control & support units Risk Management • Capital adequacy ratio • Liquidity Management Accounting & Reporting Framework • AAOIFI standards • IFRS conflict disclosures
Challenges of Islamic Banking in Oman
S y s t e m a n d C o n t r o l s Funds Segregation Challenge F u n d a m e n t al s Sharia Framework Separate Book IT System CBO Framework Business Ethics Corporate Governance Funds Segregation Assurance External/ Regulator’s Audit Sharia Inspection Funds Segregation Policies IIFM, AAOIFI & IFSB ALM Guidelines
Challenge of Regulatory Reforms q Government patronage and regulatory reforms can play a pivotal role for the development of Islamic banking like taxation benefits q Provision in Commercial codes for Islamic Banking to ensure enforceability of contract in courts like trust laws, beneficial ownership q Level playing field between Islamic and conventional banks in term of products commercial viability e. g. double taxation issues q Sharia Compliance Re-assurance via Centralized Sharia Board
Challenges in Product Development q q Need of standardization of contracts for Islamic products. Public perception management Lack of Research and Development efforts Next Generation of Islamic banking products instead of mimicking conventional banking
Pioneer of Islamic Banking in Oman
Meethaq Home Finance Started operations in 2008 First mortgage product of Oman Total portfolio is over RO 90 Mio Total Meethaq customers are over 2000 Majority of the customers are first time borrowers q Pioneer of Islamic Banking in Oman q q q
Market Leadership Initiatives Support to CBO/CMA Ifta Office First Product in Oman Public Awareness Programs/ Facebook Initiatives on MM & CM
Thank You
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