Muscat: The Central Bank of Oman (CBO) Board of Governors revised the legal framework of the banking work in the Sultanates to see how the Islamic banking will be practiced. The Board decided to introduce amendments to the banking law issued by the Royal Decree No.114/2000 related to Islamic Banking. A number of seminars and workshops have been organised and a number of central banks experts with long and mature experience in Islamic banking were invited.
The Royal Decree No. 69/2012 issued on 6/12/2012 amended the banking law to allow for the inclusion of Islamic banking at the licenced banking activities through either specialised banks or independent windows at the existing commercial banks. The banking law issued by the Royal Decree No. 114/2011, before amendment, includes 120 articles distributed onto five chapters.
The said amendment added six new articles in the new sixth chapter titled ' Islamic Banking Transactions. Articles 121,122 and 123 includes general terms related to the legal framework for the Islamic banking activities, control, supervision and that the CBO Board of Governors has the jurisdiction to develop rules and regulations for these translations.
They also provide that the CBO has the power to issue licenses for the Islamic banks and the independent windows at the existing commercial banks. Articles 124 and 125 provide some details on the banking transactions. They stipulate that such transactions should not be in violation with the tenets of Islamic Shari'a and exempting banks doing Islamic banking businesses from fees on movable real estate assets due to their special nature at the Islamic banking transactions.