Muscat: Meethaq, the pioneer of Islamic banking in Oman from Bank Muscat, recorded a momentous year in 2012, bracing itself for innovative Islamic banking operations, subject to approval from the Central Bank of Oman.
With the Royal Decree issued by His Majesty Sultan Qaboos bin Said, establishing Islamic banking operations, Meethaq is well positioned to provide Islamic financial expertise to diverse segments and thereby promote the good of society as a whole.
Hailing the Royal Decree, Sulaiman Al Harthy, group general manager — Islamic banking, said: "The Royal Decree on amendments to the banking sector laws reflects the attention accorded by His Majesty to achieve stability, prosperity and development in Oman. The Royal Decree is in harmony with the modern stage of renaissance and compatible with values of the community and its principles. His Majesty's vision encapsulates the roadmap for the present as well as the future of the development march in the Sultanate encompassing all fields."
Al Harthy added: "The creation of an efficient and effective private sector capable of participating in the economical and social development process and able to compete globally is a major achievement under the wise leadership of His Majesty. The Royal Decree creates an environment suitable for the smooth functioning and development of Islamic banking in Oman.
"The Islamic finance industry is growing very rapidly worldwide and this is a great opportunity for new Islamic banks as well as conventional banks to come together and create an environment which should make all of us proud, balanced with the Sharia law, Central Bank of Oman's guidelines, public demands and expectation, and the rule of law, as a whole.
"His Majesty's focus on the development of Oman with preservation of the identity, fundamentals and values, serve as a source of pride for all Omanis. In keeping with Islamic tenets, His Majesty Sultan Qaboos has given the consent to practice Islamic banking in Oman to fulfil the financial needs of different segments of society, which will positively contribute to the overall development of Oman."
Over a year ago, the flagship financial services provider announced the decision of its board of directors to set up an independent Islamic banking window at the bank and launch Islamic banking operations in accordance with the injunctions of Sharia.
In the run-up to comply with the CBO requirements, Bank Muscat unveiled the logo of its Islamic banking window under the brand name 'Meethaq' at the Oman Islamic Economic Forum. Further, in line with CBO requirements, the bank announced the formation of a three-member Sharia board to ensure the Meethaq operations are in compliance with Sharia. The bank has on board some of the brightest minds in Islamic finance to chart the way forward. The Sharia board is led by Sheikh Dr Ali Qaradaghi, chairman, and Sheikh Essam Mohammed Ishaq and Sheikh Majid Al Kindi as members.
During the year, Bank Muscat took major strides as part of its proposed Islamic banking operations and assigned RO150 million capital for Meethaq Islamic Banking. The Sharia board of Meethaq Islamic Banking approved RO150 million capital assigned by Bank Muscat for its Islamic banking window operations awaiting regulatory approval.
From Sharia perspective, the board endorsed the authenticity of capital allocation from Bank Muscat shareholders' fund for operations of independent Meethaq Islamic Banking. Ali Qaradaghi, explained that the capital allocation is in line with injunctions of Al Quran and As Sunnah and the fact that various contemporary Sharia scholars have endorsed the usage of shareholders' fund for Sharia compliant transactions.
Though Bank Muscat board of directors has assigned RO150 million capital for Meethaq Islamic Banking window operations, the final allocation will be determined by business opportunities in the market and the board has indicated that the assigned amount may increase if required. The capi