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Mon 30 May 2011 10:17 AM

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Oman to allow lenders to open Islamic branches

Gulf sultanate this month gave green light to first standalone Islamic bank, eyes share of Sharia-compliant lending

Oman to allow lenders to open Islamic branches
Oman was the only state among the six GCC members which had not set up a bank specifically offering Islamic products

Oman’s central bank has agreed to allow mainstream lenders
operating in the sultanate to offer Sharia-compliant banking products to
customers, the regulator said Sunday.  

In a statement to Oman’s state-run news agency, the central
bank said it had “agreed to allow the banks operating in the sultanate to open
windows through which they can practice the Islamic banks businesses and
activities.”

Oman earlier this month approved the establishment of the
Gulf state’s first standalone Islamic lender, Nizwa Bank, in an effort to tap
into the rapidly growing Sharia-compliant banking sector.

Oman was the only state among the six GCC members which had not
set up a bank specifically offering products and services complying with
Islamic law.

Oman's central bank head had said in 2007 that Oman believed
that "banks should be universal."

In a report last November, PricewaterhouseCoopers said the
$1 trillion Islamic finance industry was expected to grow by between 15 to 20
percent per year going forward.

Neighbouring Gulf state Qatar in February told all
conventional lenders to wind down their Islamic banking divisions, to restrict
Sharia-compliant services to standalone Islamic banks.

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