CBO Holds Board of Governors Meeting
The Central Bank of Oman's Board of Governors held its second meeting of the year on Monday, May 20th, 2013 under the chair of Dr. Ali bin Mohammed bin Moosa, Deputy Chairman of Board.
In the meeting, the Board reviewed various issues concerning the banking sector, including the review of the decisions taken during the symposium held in Bahla on the Development of Small and Medium Enterprises (SMEs) and the action taken by the CBO and the commercial banks operating in Oman to implement these decisions.
In addition to endorsing the amended investment guidelines of Bank Deposits Insurance Scheme Fund (BDIS) and discussing the BDIS annual report for the year 2012, the board also reviewed the economic and financial report of the Bank as on March 31st, 2013.
The board also took stock of the recommendations included in the report of IMF & World Bank Mission on Financial Sector Assessment Program (FSAP) and directed CBO's executive management to ensure the implementation of the recommendations to a maximum possible extent.
Additionally, the Board examined CBO's financial position as at the end of April 2013 and the performance of its external investments during the period under review. The Activity Report of all the CBO departments was also reviewed during the meeting.
The financial and administrative matters of CBO also came up for discussions in the meeting and the Board indicated that it has taken necessary decisions in this regard.
CBO Requires Banks to Allocate 5 Percent of Their Total Credit to SMEs
The Central Bank of Oman has mandated all the banks operating in the Sultanate to allocate 5 percent of their total credit portfolio to Small and Medium Enterprises (SMEs) in the country by the end of December 2014.
As per the new BM Circular 1108 issued on 6th May 2013, the Central Bank of Oman noted that in recognition of the relevance of SMEs’ for diversification and growth of the economy and its potential for increased job opportunities, gainful use of domestic resources and other favourable factors, CBO stipulates to increase the contribution of banks in the financing/development of SMEs as under its provisions detailed in the Circular.
As per the Circular the lending of the licensed banks to SMEs, at any time, should not fall below 5 percent of its total credit portfolio.
The circular further stated that the percentage stipulated by the Central Bank at the moment was only the minimum target and the banks shall strive to exceed this threshold to participate in the development of SMEs.
“Banks should also note that, going forward, Central Bank may consider raising the minimum target beyond 5 percent,” the Circular stated.
Additionally, the Circular stipulates that the banking sector must encourage the growth of SMEs in the country by formulating a liberal lending policy for the SME segment taking cognizance of the Government’s vision and the regulatory initiatives of the Central Bank in this regard.
Likewise the Circular also advises banks to create separate departments for SMEs to cater to their needs in a better way, ensure better credit flow and extend all sorts of assistance to facilitate entrepreneurship through SME department or otherwise in project formulation, finance and business management, leads in business initiatives, technical support, sourcing of raw materials, process management, marketing etc.,
For full details and text of the BM Circular 1108, please click here .
CBO Organizes Students’ Rally to Promote Traffic Safety
The Central Bank of Oman is organizing a students’ rally on Thursday, May 9th 2013 to promote and create awareness about the traffic safety in the country.
The event which will be held at the Theater of Ministry of Education in Al-Watayyah at 7 pm in the evening will be formally inaugurated by H.E. Sultan bin Salim Al-Habsi, Secretary General of the Supreme Council for Planning.
Her Excellency Dr. Madiha bint Ahmed Al-Shaibaniyyah, Minister of Education, Their Excellencies’ the Undersecretaries from the Ministries, officials from the Royal Oman Police, CEOs, leaders and GMs of commercial banks, officials from CBO and families of students will participate in the program.
Commenting on the student’s rally, H.E. The Executive President Mr. Hamood bin Sangour Al Zadjali observed that the rally which is being held under the slogan " Your Safety is Our Goal" was in compliance with the Royal Orders of His Majesty Sultan Qaboos bin Said and His Majesty’s wise directives to all segments of the Omani society to share responsibility on traffic safety. He reminded that His Majesty has called upon all the sections of the society to exert all the necessary efforts to eliminate traffic accidents in the country which were resulting in several human deaths and fatal injuries triggering negative impact on the Sultanate’s socioeconomic affairs.
His Excellency also noted that CBO has constituted an internal Traffic Safety Committee several months ago to take up the task of educating and creating awareness about traffic safety among its employees. The internal Committee is comprised of a number of officials from different departments in the bank.
He pointed out that the upcoming student rally is part of the CBO’s Traffic Safety Committee’s endeavor to create awareness on the road and traffic safety. As part of the campaign, the Committee also organizes other awareness programs including lectures on traffic safety and a host of other such issues which have negatively impacted the society as a result of human and material loss in traffic accidents, H.E. informed.
In an appeal to the society, His Excellency stressed the need for every individual to be proactive and committed towards this noble cause not only by self-indulging in the activities but also by creating awareness about the traffic safety among their family members, friends and other people.
As part of the program, students from several public schools will participate in the program, in addition to a prize distribution ceremony which will award the winners of CBO’s drawing contest meant for its staff children and organized under the slogan "Driving: Behavior and Education".
CBO Declares Friday and Saturday to be Official Weekend Holidays
In line with the Royal Directives from His Majesty to
standardize the weekend holidays in the Sultanate of Oman,
the Central Bank of Oman has declared Friday and Saturday to
be the official weekend holidays for the banking sector in the country.
A circular issued from the office of H.E. The Executive President of CBO
said that all the banks including the Central Bank of Oman will henceforth –with effect from May 1st 2013 - observe the two designated days
(Friday & Saturday) as the official weekend.
Thursday 2nd May 2013 Announced as holiday
Subsequent to a Royal Directive from His Majesty, May 2nd 2013
Thursday has been declared a holiday for both the Central Bank
of Oman and all the other licensed banks and financial institutions
in the country.
A CBO circular addressed to all banks operating in
the Sultanate announced the holiday.
Annual Bankers Meeting 2013 Held
The Central Bank of Oman held the Annual Bankers meeting on Wednesday April 24th 2013 at its premises in CBD Ruwi. Addressing a gathering of about 70 bankers including CBO officials, H.E. The Executive President called upon the banking community to gear up their infrastructure and tweak their policies to accelerate credit flow to SME sector in line with the Government policy.
“The Government has made SMEs as thrust area in its economic policy. The bankers will appreciate that growth of SMEs is critical to alleviating the unemployment problem in Oman. I, therefore, urge the banking community to gear up their infrastructure and tweak their policies to accelerate credit flow to SME sector in line with the Government policy,” H.E. noted in his address to the bankers.
Please click here for the full text.
CD Results Worth RO 392 Million Announced
The Central Bank of Oman has announced its weekly Certificate of Deposit tender results on Monday April 22nd 2013. A statement from the CBO’s Monetary Operations Domain revealed that the total amount allotted in CDs for the issue no. 814 was RO 392 Million. The average accepted rate of interest for these certificates was 0.13% while the maximum accepted interest rate was also 0.13%.
Likewise, the highest interest rate received was 0.17 percent and the lowest was 0.11 percent. The tenor of these certificates is 28 days and the maturity date is 22nd May 2013.
The statement also indicated that the next tender for the CD results will be held on 29th April 2013. The Repo Rate for the period - April 24th to 30th - is one per cent.
National Committee on AML-CFT Reviews Pertinent Issues & Achievements
The National Committee for Anti Money Laundering and Terrorism Financing which held its first meeting for the current year on Monday April 22nd 2013 reviewed its major achievements over the last one year at the local and at the global level. The meeting also discussed several other pertinent policy issues and deliberated on devising means to fill the gaps if any between the policy framework and its implementation part.
Held at the CBO premises, the meeting was chaired by H.E. Hamoud bin Sanjour al- Zadjali, The Executive President of the CBO who is also the Chairman of the Committee.
The Committee discussions also focused on the national comprehensive plan which aims to enhance the anti-money laundering and terrorism finance systems in the country. The Committee also deliberated their plans of attending and participating in international seminars such as the MENAFATF conferences and IMF workshops to develop expertise in the field.
The Committee pondered over how to overcome the challenges faced by different implementing authorities in implementing the AML and Finance of Terrorism policies and ensure that the policy implementation was in line with the best known international standards and practices.
Other topics which came up for discussion during the meeting included the progress made on the legislative aspects of the AML policies and the outcome of the final draft for amending the AML and Finance of Terrorism Law issued by the Royal Decree No. 79/2010. The amendments are being made to several aspects of the Law such as the due diligence, the preventive measures, the custom declaration, the international cooperation and the imposition of penalties in case of violations.
Additionally, the meeting also reviewed the regular follow up report slated to be discussed at the general assembly meeting of MENAFATF to be held next week in the Republic of Sudan.
CBO to Auction 42nd Government Development Bonds issue worth RO 80 million
The Central Bank of Oman has announced a new Government Development Bonds issue worth OMR 80 million with a maturity period of seven years. The 42nd issue from CBO will carry a coupon rate of 4.25 per cent per annum.
A release from the CBO’s Monetary Operations Domain said that the issue will be open for subscription between April 28 and May 6th 2013, while the auction will take place on May 8, 2013. The issue settlement date will be on May 13, 2013, the release said.
Further details indicated that the interest on the new bonds will be paid on November 13th and May 13th every year until maturity date on May 13, 2020.
While the investors are required to apply for these bonds only through the competitive bidding process, they should submit their bids through the licensed banks operating in the Sultanate.
However, investors with applications of OMR1 million and above can directly submit their bids to CBO after getting them endorsed from their respective banks, the CBO statement advised.
The bonds which are direct and unconditional obligations of the Government of Oman can be used as a collateral security to obtain loans from any local licensed bank and can also be traded at prevailing market rates through the Muscat Securities Market (MSM).
The details of the bonds allotted will be recorded in the register maintained by the Muscat Clearing & Depositary Company. Prospectus and application forms can be obtained from any licensed bank operating in the Sultanate.
The issue is open to all investors of any nationality residing in the Sultanate only and those who are residing outside the country are not eligible to subscribe.
The Sultanate of Oman Government Development Bonds.
CBO Issues Cautionary Public Notice on Fraud Financial Activities
As part of its drive to create awareness and educate the public at large, the Central Bank of Oman has issued a cautionary notice warning the citizens of the country against the potential financial frauds.
In an advisory note issued from the Banking Development Department, the notice said that the CBO draws attention of the public to the widespread suspicious financial activities and attempts at fraud in the country and abroad. The public notice also explained the various methods adopted and deployed by these fraudsters to siphon off money from the innocent and gullible residents of the country.
The statement said that the fraudsters were deploying new and innovative methods, employing subtle means to loot innocent residents.
“In some cases, certain fictitious and suspicious companies and individuals based outside the Sultanate have contacted Omani citizens and expatriates via the Internet or by fax, claiming that the victim has won a lottery or a draw or offering a suspicious but profitable transaction and trading deal in return for assisting them in gaining access to or taking advantage of banking and financial facilities available in the Sultanate,” the CBO statement explained.
Additionally, fraudsters were also inciting the resident to undertake speculative dealing in foreign currencies. Under the prevailing laws and regulations, the CBO statement explained that this activity is prohibited in Oman and hence no speculative dealing in foreign currency can be done.
“The so-called dealers or brokers offer these services through what has been dubbed trade representation or agency activity on behalf of institutions based abroad. They are not, in the strictest sense, licensed by the Central Bank,” the CBO statement warned.
Referring to other types of offences, the public notice said that fraudsters were using fake or stolen cheques, drawn on banks abroad, and were subsequently selling these instruments to unsuspecting members of the public. “They come with an endorsement and are sold at a discount. The new holder (alleged payee) is promised that they will be able to encash these cheques at local banks for their full value, thereby assuring the victims of a good profit,” the CBO notice informed.
Creating awareness on a host of other fraudulent issues that have come to CBO’s notice, the premier monetary authority felt that it was necessary to issue these cautionary notices repeatedly to the general public so that they can be cautious in their approach and dealings with strangers and unauthorized entities or individuals.
“The public should restrict all their financial dealings to licensed/regulated institutions. If any doubts arise, they should seek the advice of their banks and professionals for all aspects of the deal, including assessing the accreditation, legality, and reliability of the persons or institutions offering financial products and services. They should immediately report any unauthorized and suspicious approaches to the Royal Oman Police,” the advisory said.
For full details on the types of offences and financial crimes and the modus-operandi adopted by the fraudsters, please read the full text of the public notice here .
BCSB System Restored and Opened to the banks and financial institutions from 10th April 2013
“The new BCSB (Banking Credit Statistical Bureau ) system which was suspended from 17th
September 2012 has been restored and opened to the banks and
financial institutions effective from 10th April 2013. BCSBD (Banking Credit Statistical Bureau Domain)
team in coordination with IT Department and the vendor has restored the
system with all active/open credit facilities as of 31st March 2013
collected from banks and financial institutions with a short notice.
In going forward, BCSBD team will cleanse the database while refreshing
the data from the institutions concerned. Once this activity is completed,
BCSB system will be better than ever before. BCSBD thanks IT Department and
the vendor for their support without which
the restoration of the system wouldn’t have been a success”.
Banks called upon to achieve even higher Omanisation levels
Highlighting the positive response received from banks on
Omanisation requirements placed on Banks in 1995 through BM circular 762,
CBO has called upon the banking sector to strive for higher levels.
In a circular BM 1105 to all licensed banks operating in the Sultanate of Oman,
CBO noted; “considering the positive response received from banks,
scope for further progress on the subject and increased emphasis
being placed on a matter of social and national importance.”
The circular called for the following:
- All banks need to strive and reach levels higher than 90%.
- Top and middle Management category to be split into two consisting of Senior Management with Omanisation level of 65% to be achieved by December 2015, and 75% by December 2016 (plans to raise it to 90% by December 2018) and Middle Management Cadres, Omanisation level of 90% to be achieved by 2016.
- Non Clerical cadre need to have 100 % Omanisation.
The Circular also highlighted some exemptions which included Islamic banks and Windows who will be treated separately and given four years from commencement of business for compliance with overall ratio of 90%.
For details kindly click
“Omanisation of Personnel in Banking Sector”
H.E. Inaugurates Harvard’s Executive Education Program
H.E. Mr. Hamood Sangour Al Zadjali, the Executive President of CBO, inaugurated the Harvard Business School’s Executive Education program on “Managing Strategically, Leading for Results” on Saturday, March 9th 2013 at the Shangri La’s Bar Al Jissah Resort & Spa.
The week-long program being held in collaboration with the Kuwait based – Institute of Banking Studies will impart specialized training to senior bank executives. Dr. Yaqoob Al Sayed Al Rafai, Managing Director IBS-Kuwait (KIBS), Mr. Anees Moosa Al Lawati, Acting Dean of the College of Banking and Financial Studies, Mr. Desmond Neilson, KIBS Training Director and several other local and foreign dignitaries participated in the inaugural function.
Mr. Mahboob Al Moosa, VP Admin, CCRD, & IHLD and Mr. Abdul Qahar Al Khanjari, VP ITD and Payment Systems will be attending the six-day workshop, which will come to an end on March 14th 2013. At the end of the program, participants will receive a Harvard Business School certificate, verifying that they have successfully completed the program. 52 other officials including those from Central Banks, local and foreign banks operating in the GCC region are also participating in the program.
Communication and Corporate Relations Department put up a small kiosk at the venue in Bar Al Jissah Resort & Spa, showcasing all the CBO publications including the Annual Reports, Monthly and Quarterly Statistical Reports and copies of Al Markazi Magazine for the participants and other dignitaries who will be attending the workshop.
IMF Holds AML/CFT Workshop for Supervisory Authorities
The International Monetary Fund’s AML/CFT Mission to Muscat recently held a training workshop on Anti-Money Laundering/Combating Financing of Terrorism for the Sultanate’s supervisory authorities.
The day-long training program held at the CBO premises saw participation of several government dignitaries, officials from Ministries of Social Development, Ministry of Commerce and Industries and Ministry of Justice in addition to those from the CMA (Capital Markets Authority) and the Financial Investigation Unit (FIU).
Beginning the session, Mr. Chady El-Khoury, the FIU Counsel and Legal Expert presented an overview of the Financial Action Task Force’s (FATF) revised standards on AML/CFT. FATF is an inter-governmental body established in 1989 by the G8 countries.
Mr. El-Khoury explained that the FATF Recommendations which were first issued in 1990, were revised in 1996, 2001, 2003 and most recently in 2012 to ensure that they remain up to date and relevant, and that they are intended to be of universal application. The FATF has developed a series of Recommendations that are recognised as the international standard for combating of money laundering and the financing of terrorism and proliferation of weapons of mass destruction.
Addressing the gathering, Mr. Francisco Figueroa, IMF’s senior financial expert outlined the new set of AML/CFT compliance requirements, especially with regard to its three key components, namely, Customer Due Diligence, Record Keeping and Reporting of Suspicious Transactions. He said that it was necessary for the Central Banks to ensure that these three components are included as general obligations in the law.
Mr. Figueroa called upon the regulatory authorities to install stringent customer due diligence systems, and explained that it was necessary for Central Banks to not only advise its clients and customers (banks and financial institutions) to seek all the information pertaining to their customers (in the process of a financial transaction) but also warrant them to maintain records of such information for at least five years. Additionally, if the banks notice any of the transactions to be suspicious, they should report it to the FIU immediately and the investigation unit will take care of the case further.
“Please remember that it is not our job to determine whether money laundering is going on in the country or not. We are not acting as investigators here. As a Central Banker, our job is to only determine whether all the AML/CFT compliance standards are in place or not and ensure that they are being followed stringently by the concerned parties,” Mr. Figueroa said. Referring to the role the Central Banks are required to play as part of the FATF AML/CFT compliance requirements, he added that as a Supervisor, your (CBO’s) role is to ensure that all banks and financial institutions effectively identify, analyze and report the suspicious transactions to the concerned authorities.
In the later part of his presentation, Mr. Figueroa explained how Central Banks should adopt a Risk Based Approach while conducting on-site and off-site examinations and risk assessments. He said that based on the approach the Central Banks are required to identify potential risks with all the financial institutions, categorize them into high risks, medium risks and low risks profiles, develop supervision strategies in line with the risk profiles and eventually initiate measures to mitigate them.
Speaking on the challenges in undertaking risk assessment measures, Mr. Figueroa pointed out that lack of guidelines as to the core elements of a sound and effective risk assessment system was a major challenge for the competent authorities. According to him another challenge was to understand the financial institution’s perspective on risk assessment VS competent authorities’ perspective of risk assessment.
IMF Consultant Mr. Jose Antonio Monreal, one of the members of the visiting IMF delegation, spoke about the challenges in ensuring AML/CFT compliance owing to new technological innovations and advancements. He pointed out that the advent of Internet and the Internet based technologies has triggered development of new products, new business practices and new cash delivery mechanisms. “To deal with the Internet based transactions we have to ensure deployment of enhanced due diligence systems and services. We have to have specific systems and processes in place to avoid misuse and abuse of our financial transactions,” Mr. Monreal asserted.
The day-long presentation was divided into two sessions with a 30 minutes tea break between each of them. Every presentation was followed by a question & answers session allowing the participants an opportunity to seek answers to their potential queries and questions.
H.E. The Executive President, Mr. Hamoud Sangour Al Zadjali and Vice President Mr. Hilal Ali Al Barwani attended the opening session of the workshop.
CBO Reviews Swap Facility Price Mechanism
In its latest circular BM 1104, the Central Bank of Oman has indicated
that it has reviewed and revised the price mechanism for Swap facility
in order to ensure competitive pricing. The Master Circular consolidates
the currently applicable instructions to this facility and replaces the
Master Circular BM 1020 dated April 16th 2007.
As per the price review, the applicable (first leg) exchange rate for US Dollar/Omani
Rial will be the mid-rate between bid and offer rates as per the Central Bank of Oman
quotations, i.e., 0.384500 Baizas for one U.S. Dollar and the applicable domestic
(Omani Rial) benchmark rate will be the prevailing Repo Rate charged by the Central
Bank of Oman for Repo transactions with licensed banks.
Likewise, the applicable external (U.S. Dollar) benchmark rate will be U.S. Dollar One
Month Libor Rate as fixed by British Bankers Associations of the preceding Friday.
The circular said that the rate will apply irrespective of the swap duration
and will prevail from the date of issue until next issue.
Additionally, the circular said that an adjustment rate may be added to the domestic
benchmark rate, for the time being. The adjustment rate is set at plus 100 bps.
On the Limit, the CBO circular indicated that the facilities of discounting/rediscounting
of Commercial Papers and this Forex Swap will be operated under an overall limit
of 25 percent of the latest applicable net worth of the Bank (as stipulated in
Circular BM. 1054 dated 24th December, 2008).
The Banks will have the option to avail either of the facilities or a combination
of both within the overall limit allocated. The Swap facility shall be for the
duration of overnight to a maximum of one month and the Swap operations can be
carried out for the same day value to spot date value.
Swap facility is a window to assist licensed banks obtaining Omani Rial short term
liquidity needs in addition to other available facilities in place.
The Central Bank of Oman provides the Swap Facility for buying US Dollar
Spot against selling the same forward.
CBO Holds Training Program on Islamic Sukuk
The Central Bank of Oman is holding a five-day training program on “Theoretical and Operational Aspects in Implementing Islamic Sukuk”-- for creating awareness on the subject for its employees and other concerned parties such as the Capital Markets Authority (CMA) and the Ministry of Finance.
The training is part of the premiere monitory authority’s efforts to promote learning among its staff in the back drop of Islamic banking operations beginning in the country.
Speaking to the portal news team, Mr. Duraid Al Asfoor, Assistant Manager BED, who is also the Head of the CBO’s Islamic Banking Staff Development Task Force (IBSDTF) said that these workshops will impart the necessary training to the concerned staff involved in the regulation of Islamic banking in the country and also generate a common understanding about the subject among them.
Giving a brief account on the activities of the workshop, Mr. Duraid informed that the workshop will highlight various aspects of “Sukuk” which is considered to be the fundamental tool and a primary instrument for raising capital and liquidity for Islamic finance.
Besides discussing the core and fundamental principles of the “Sukuk in Islamic Finance”, the workshop will also clearly demarcate and explain the differences between different Islamic Sukuk such as Murabaha, Ijara etc.
Additionally, experience of different countries which have implemented “Islamic Sukuk” will also be shared, discussed and analyzed at the workshop deliberations.
Apart from 16 in-house participants from BCDs (who also are the members of the newly formed Islamic Banking Staff Development Task Force), about 14 participants representing the Capital Markets Authority (CMA), the Ministry of Finance, the Muscat Securities Market, the Tax Authority and the Supreme Council for Planning are also participating in the workshop deliberations which will come to an end on Wednesday, February 6th 2013.
The five-day training workshop being held under the auspices of H.E. The Executive President and in collaboration with Islamic Research & Training Institute (IRTI), of the Jeddah-based Islamic Development Bank, is the second of its kind this year, after the recently concluded session on Islamic Finance, where delegates from about 10 countries participated.
CBO Organises a Workshop in Islamic Finance
The four-day workshop on developing human capital in Islamic finance began on Sunday,
January 27th 2013 at the City Seasons Hotel in Al-Khuwair where H.E. The Executive President,
Hamood Sangour Al Zadjali will hand over the certificates on Wednesday 30th January 2013.
The workshop is organized by CBO in collaboration
with Bank Negara Malaysia and Islamic Development Bank.
*Mid-Year Review of the Omani Economy 2012
The CBO has brought out the Mid-Year Review of the Omani Economy for 2012
covering recent macroeconomic developments in the Sultanate.
Feedback on the Mid-Year Review of the Economy 2012 may be sent to email@example.com
* H.E. Presides Over CBFS Graduation Ceremony
H.E. The Executive President presided over the 8th batch graduation ceremony of 46 MBA students which was held on January 14th 2013 at the CBFS campus in Wilayat Bousher.
The ceremony held in collaboration with the Glasgow, UK based University of Strathclyde, saw participation from University officials, CEOs and GMs of local commercial banks, CBFS board members and the family members of the graduating students.
The ceremony which was held for the 11th time this year, marking the successful completion of the graduation program by the MBA students.
Mr. Anees Mousa Baqir Al Lawati, CBFS Acting Dean, said that the CBFS’ MBA program is designed in such a way that the students are equipped with the relevant management experience essential for meeting the current job market demands. He also affirmed that CBFS was not only contributing in enabling the students to thrive in a rapidly changing world environment, but also excelling in creating a strong and robust human resources development system.
CBFS is holding the MBA program in collaboration with the UK based university - University of Strathclyde - for over 12 years now, ever since it began offering the course in 2001. While more than 270 students have so far successfully completed the MBA program, the number of enrollments for the current year has already reached 160.
It may be interesting to note that a recent poll titled “Global MBA Rankings 2012” by the Financial Times (British Daily) has ranked the University of Strathclyde’s MBA programme to be one among the top 100 best Post-Graduate (Master’s Degree) programs being offered by different universities in the world.
CBO Urges Public Not to Tamper Banknotes
The Central Bank of Oman
has appealed to the general public urging them to abstain from tampering
the currency notes. In a press release issued here on January 5th 2013,
the Central Bank of Oman observed that some members of
the public were in the habit of putting stamps and stapling pins to
the currency notes, while some others tamper the bank notes by noting down
numbers and scribbling names on them, which the premier monetary authority
referred to as uncivilised behaviour and said that it may attract penal action.
The CBO further said that such a treatment to the notes will impact the shape,
the quality of the banknotes and therefore it was necessary to acknowledge that
these are uncivilised behaviours and that they are punishable under the provisions of law.
The press release further stated that such an activity will have a negative impact on the
legal tender and result in the disfiguring of banknotes.
CBO Issues Circulars Revising Application and Licensing Fees
The Central Bank of Oman has announced the revision of fee structure for application and licensing of all banks, finance and leasing companies and money exchange houses in the Sultanate. In the circulars BM 1103, FM 30 and ME 27 addressed to banks, finance and leasing companies and money exchange houses, respectively, CBO said that the new fee structure shall be applicable with effect from January 1st 2013.
The circulars stated that the CBO’s of Board of Governors
after reviewing the fee structure at its meeting on 23rd December, 2012, and also considering the time span since the last revision, have resolved to revise the fee structure.
As per the circular BM 1103, the revised fee for application to conduct banking business in
the Sultanate has gone up from RO 5000 to RO 6000. Similarly, as per circular FM 30,
the revised fee for an application to start finance or a leasing company has also gone up to
RO 3000 from the existing RO 2500. Likewise,
the same for the Money Exchange Cos has increased to RO 600.
For details kindly click below:-
CBO Issues Islamic Banking Regulatory Framework
In pursuance to the Royal Decree 69/2012 which amended the Banking Law 2000,
the Central Bank of Oman has issued the much awaited Islamic Banking
Regulatory Framework (IBRF). The IBRF running into 591-pages is a detailed
and comprehensive document covering all aspects of Islamic banking.
Issuing the Circular IB-1, the first ever under the head Islamic banking,
the CBO communiqué revealed that the IBRF document has been categorized under different
titles and all issues concerning with Islamic banking such as the info on licensing
requirements, the general obligations and Governance, the accounting standards and auditor reports, the powers of supervision and control, the capital adequacy, the credit risks, the market risks, the operational risks, the liquidity risks and miscellaneous can be obtained in the document.
The Islamic Banking Regulatory Framework (IBRF) document has been uploaded on the
CBO Internet website enabling easy reference for all the concerned and interested parties.
For full details on Islamic Banking Regulatory Framework kindly Click here
41st Issue of GDB Evokes Overwhelming Response
The Central Bank of Oman's 41st issue of government development bonds worth OMR 100 million received a remarkable response from the domestic investors and institutions. The bond, which was auctioned on December 3rd, was oversubscribed by OMR 79.5 million and received bids worth OMR 179.5 million, as against the Issue amount of OMR 100 million.
It may be noted that most of the previous issues by CBO had also evoked similar
overwhelming response from the investors, including the 40th Issue, where total
amount of its bids was OMR 209 million, and the issue amount was OMR 100 million.
As per the data received from Monetary Operations Domain, a large number of
commercial banks, including specialized banks operating in the Sultanate applied
for the 41st Issue. The sector wise allotments report revealed that the commercial
banks got the major share of the allotments. The banks which bid for the highest
number of bonds, applied for issues worth OMR 103.70 Million, out of which they
received allotments worth OMR 57.19 Million. Likewise the pension funds companies
which also applied for issues worth OMR 56.13 million received the second highest allotments in bonds at OMR 33.80 million in the auction.
The third largest share of allotment of 41st Issue was garnered by local
Financial Institutions. They were qualified for an allocation of OMR 7.5 million
worth of bonds out of their bids amount of OMR. 8.64 million.
On the other hand, however, individual investors' participation in
the new bond issue was notably slender. This sector’s bids amounted to
only OMR 0.03 Million, and there were not eligible for any bonds allotment.
The average yield equivalent percent to the accepted price for the current
issue was 2.27 percent at price of OMR 104.610. While the highest yield
equivalent was at 2.45 percent for OMR 103.745, the lowest was at 1.89 percent
to an accepted price of OMR 106.460.
41st Issue of Government Development Bonds Announced
The Central Bank of Oman has announced its 41st issue of government development bonds
open for subscription from November 17th, 2012. The size of the new issue is fixed at RO100 million with a
maturity period of five years and will carry a coupon rate of 3.25 per
cent per annum.
According to a release from CBO’s Monetary Operations Domain,
while the issue will be open for subscription
between November 17th and November 29th, 2012,
the auction will be held on December 3, 2012.
The issue settlement date will be December 5, 2012.
Likewise, interest on the new bonds will be paid on 5th of June and 5th of
December every year until maturity date on December 5, 2017.
CBO Issues Silver Coin to Commemorate Muscat’s Selection as ‘Arab Tourism Capital’
To mark the selection of Muscat as the “Arab Tourism Capital” for the year 2012,
the Central Bank of Oman has issued a silver commemorative coin which depicts
a coloured logo of the occasion. A circular BM No.: 1098,
from H.E. the Executive President’s Office advised that the commemorative coin
was a legal tender for its face value and that it should be accepted by all banks
when presented by the public.
The circular further stated that the coin weighing about 28.28 gms and
in denomination of R.O 1 can be purchased from Central Bank of Oman at a price
of R.O. 26.
CBO Urges Banks to Update Customer Information
CBO urges all the commercial banks to update customer profiles on an on- going basis as this will enhance banks to monitor transactions and issue alerts to avoid possible fraudulent transactions. This will also help the banks in contacting customers on time in case of attempted frauds.
Public Finance Management Anchored on Fiscal Sustainability:
Enhancing Non-hydrocarbon Revenues and Capping Spending Flexibility in Oman
This paper analyzes a number of fiscal indicators for Oman over the recent five-year period with the aim of assessing recent trends in non-hydrocarbon government revenues, the performance of the state budgets, and recommending measures that would promote fiscal sustainability. The prevailing trend over the five-year period selected for this study pointed to some stagnation insofar as
non-hydrocarbon government revenues were concerned, which to a great extent was in contrast to the overall economic performance. Moreover, actual government expenditure has been significantly above approved budget approbation. Two key measures are suggested in this paper to mitigate these two trends. First, enhance non-hydrocarbon government revenues by assessing their existing sources and subsequently implementing effective measures to redress the situation. Second, introduce some parameters linked to the approved budget in order to limit public expenditure flexibility even in time of favorable crude oil prices.
Assessment of Liquidity Conditions of Commercial Banks in Oman
In order to make an assessment of liquidity conditions in the banking system in Oman, the paper reviewed following indicators:
a) growth of credit and deposits at the aggregate as well as sectoral levels;
b) commercial banks’ net foreign assets position;
c) their excess reserves with the CBO;
d) lending ratio of the commercial banks; and
e) the interest rate scenario prevailing in both money and credit markets.
The liquidity conditions continue to remain comfortable with the banking system in Oman consistent with easy monetary policy pursued by the CBO. Easy liquidity condition in the banking system could be observed from large roll-over of CBO CDs and commercial banks’ excess reserves with the CBO. Despite low global interest rates, banks in Oman built-up sizable amount of assets abroad, implying excess liquidity in the banking system relative to its demand. Interest rate scenario in Oman is characterized by softening trend due to excess liquidity. Despite buoyancy in the MSM and likely issuance of a number of IPOs/ rights issues in 2012, their impact on bank liquidity may at best be frictional, unless issuances of large IPOs are bunched together. There is no regulatory constraint which may come in the way of credit expansion in Oman. The present liquidity position is appropriate and does not warrant any proactive action by the CBO to support the recovery
CBO to License Islamic Banking Through Exclusive Islamic Banks and Windows of Existing Licensed Banks
Circular BM 1081
Deemed as one way of doing banking business under the Banking Law, Authorized Islamic banks and Islamic banking windows, shall be subject to the overwhelming requirement of Shariah' compliance in addition to conforming to other applicable requirements under the Banking Law and other laws.
Islamic banking is responsible banking based on faith wherein certain lofty social, religious and morals principals are
paramount. Nothing should be done to undermine the basis and attract risks, financial, operational, reputational, and legal. The imperatives of Shariah compliance is emphasized. There should be no compromise on prohibition of riba, gharar or association with the forbidden, sanctity of contract shall be recognized and observed in details of disclosure and enforcement.
Accordingly, applicants, proposed entrants and existing licensed banks proposing to do Islamic banking, shall first and foremost familiarize themselves with requirements of Shariah' compliant banking to equip themselves in all respects and demonstrate the same to the Central Bank at the time of application.
CBO Announces New Set Targets for Omanisation of Personnel in
Finance & Leasing Companies
CBO's Board of
Governors has decided to increase the Omanisation ration
requirement in all Finance and Leasing Companies to be at least
75% and 80% by the end of 2011 and 2012. In the top and middle
management positions, it should be 50% Omanised and 95% for
clerical and 100% non-clerical staff by the end of 2010.
Issues BM 1080 Circular to Banks on Outsourcing Regulations and
CBO has issued
policies and guidelines for outsourcing by licensed banks as it
poses a significant risk implications on banking services with
respect to confidentiality to banking operations. It also
impacts employment and career opportunities for Omanis and tax
Announces New Set Targets for Omanisation of Staff in Money
CBO's Board of
Governors has decided to increase the Omanisation ration
requirement in all Money Exchange Companies to be at 55% by the
end of 2011, 60% by the end of 2012 and to reach 65% by the end
Circular BM 1078, FM 27 and ME 23 on Combating Frauds
requirement to Banks, Financial Institutions and Money Exchange
Companies for combating frauds is: 1. to have policies and
procedures in place to control and avoid fraud occurrence, 2.
Investigate, follow up and take action against fraudsters,
3.Prompt Report to be sent to Royal Oman Police and CBO.
Mid-Year Review of the Omani Economy 2010
The Central Bank
of Oman has issued for the first time, a Mid-Year of the Omani
Economy Review for 2010. The Mid-Year Review covers developments
relating to the recovery of the Omani economy, price situation,
monetary conditions, financial markets, foreign trade and
balance of payments and macroeconomic outlook.
CBO launches Electronic
Cheque Clearing System throughout the Sultanate
The Central Bank
of Oman's managed clearing houses in Sohar and Salalah have stopped
any physical cheque clearing and settlement as cheques are now
handled electronically. The primary benefit of the system is
that cheques can be settled on the same day.
The Central Bank of Oman
is responsible for maintaining the internal and external value of
the national currency. It is also the single integrated regulator
of Oman's financial services industry.
It is committed to excellence in providing monetary and financial
stability and fostering sound and progressive financial sector to
achieve sustained economic growth for the benefit of the nation.
Foreign Exchange Rates
Certificate of Deposit Tender Results
Monthly Bulletin March 2013
The growth in the banking sector that stemmed from the
increase in the credit and deposits of banks and the positive
outlook of the economy catalyzed the growth of monetary aggregates.
The key drivers of monetary expansion during the period were the increase in net foreign assets by 11.2%
as well as the increase in domestic assets by 7.3%.
Monthly Bulletin February 2013
The key drivers of monetary expansion during the period was
the increase in domestic assets which rose by 11.3 percent followed by
net foreign assets of the banking system by 8.3 percent.
Monthly Bulletin January 2013
Of the total credit to the private sector by end January 2013,
the share of the household sector (mainly under the personal loans category)
stood at 46.5 percent, closely followed by the non-financial corporate sector
at 46.2 percent, financial corporations at 4.9
percent and other sectors the remaining 2.4 percent.
Quarterly Bulletin December 2012
During the year 2012, the Omani economy continued the growth momentum aided
by high crude oil prices and sustained domestic demand, supported by large
public expenditure and accommodative monetary policy pursued by the CBO.
Monthly Bulletin December 2012
With the increase in both bank deposits and credit, monetary aggregates
registered significant growth. Broad money (M2) increased by 10.7 percent
to RO 10,912 million in December 2012 compared to RO 9,854.9 million in December 2011.
Monthly Bulletin November 2012
During the year 2012,
strong GDP growth and supportive monetary
and fiscal policies had a favorable impact on
business growth and performance of commercial banks.
Oman’s banking system remained sound, resilient and
profitable in 2012. Total assets of commercial banks
increased by 15.3 percent to RO 20,681.4 million in November
2012 compared to RO 17,934.2 million in November 2011. Total
credit expanded by 16 percent to RO 14,333.6 million at the
end of November 2012 from RO 12,354.4 million a year ago.
Monthly Bulletin October 2012
The overnight RO domestic
inter-bank lending rate increased to 0.135 percent in
October 2012 from 0.081 percent in October 2011. In respect of
the domestic interest rate structure of commercial banks, the
weighted average interest rate on RO deposits (demand, savings & time
deposits of all sectors) declined from 1.427 percent in October 2011
percent in October 2012, while the weighted average RO lending rate
decreased from 6.373 percent to
5.741 percent during the same period.
Quaterly Bulletin September 2012
The Omani banking sector
continued its positive growth trend in 2012 consistent
with the sustained growth of the real economy. Gross domestic product
(GDP) at current prices for Oman increased by 18.9 percent to RO 7371 million
during the first quarter of 2012 from RO 6,198.6 million
during the same period last year. While nominal GDP emanating from the
petroleum sector posted a growth of 25.7 percent, non-petroleum sector
GDP rose by 12.4
percent during the first quarter of 2012.
Monthly Bulletin September 2012
During the year 2012 the balance sheet of commercial bank’s
strengthened further due to the robust growth in deposits and credit. Total assets of
commercial banks increased by 17.6 percent to RO 20,229.9 million in September 2012
compared to RO 17,203.6 million in September 2011.Total credit expanded by 17.4 percent
to RO 13,954.6 million at the end of September 2012 from RO 11,882.2
million a year ago.
Mid-Year Review of the Omani Economy 2011
The CBO has brought out the Mid-Year Review of the Omani Economy for 2011 covering recent macroeconomic developments in the Sultanate. Feedback on the Mid-Year Review of the Economy 2011 may be sent to firstname.lastname@example.org
Monthly Bulletin August 2012
The overall fiscal balance as well as the country’s external
current account continued to improve significantly mainly due to the high crude oil
prices prevailing in the international market. Consistent with sustained recovery
of the Omani economy,
the monetary and banking indicators in Oman continued to strengthen.
Quarterly Bulletin June 2012
As regards the fiscal situation, government revenues for the first half of 2012
increased by 35.4 percent to RO 7,369.8 million compared to RO 5,443.3 million a year ago,
while total expenditure rose by 14 percent to RO 5,763.4 million from RO 5,056.7 million
during the same period in the previous year. The overall surplus was RO 1,606.4 million at
the end of June 2012 compared to a smaller surplus of RO 386.6 million witnessed during the
first six months of 2011. Consistent with sustained recovery of the Omani economy,
the monetary and banking indicators in Oman continued to be favorable in 2012.
Monthly Bulletin July 2012
The overall fiscal balance as well
as the country’s external current account continued to
improve significantly mainly due to the high crude oil prices
prevailing in the international market. Consistent with sustained
recovery of the Omani economy, the monetary and banking indicators
in Oman continued to strengthen.
Monthly Bulletin June 2012
Gross domestic product (GDP) at current prices for Oman increased by 18.9 percent to RO 7371 million during the first quarter of 2012 from RO 6,198.6 million during the same period last year. While nominal GDP emanating from the petroleum sector posted a growth of 25.7 percent, non-petroleum sector GDP rose by 12.4 percent during the first quarter of 2012.
Monthly Bulletin April 2012
As regards the sources of broad money supply (M2), net foreign assets of the banking
system (including CBO) increased by 25.7 percent to RO 6,058.5 million in April 2012
from RO 4,820.9 million in April 2011, while domestic assets increased by
6.5 percent to RO 4,204.9 million from RO 3,946.8 million during the same period.
Quarterly Bulletin March 2012
Gross Domestic Product (GDP) at current prices increased by 22.7 percent
to RO 27,945.4 million in 2011 from RO 22,773.0 million last year.
While nominal GDP emanating from the petroleum sector posted a growth
of 36.3 percent, the non-petroleum sector GDP rose by 11.4
percent in 2011. The price situation remained, by and large,
under control in Oman during 2011. The average rate of inflation
for the Sultanate stood modestly higher at 4 percent
compared to 3.3 percent a year ago.
Monthly Bulletin March 2012
Net foreign assets of the banking system (including CBO) increased by 21 percent to RO 6,016.0 million in March 20
12 from RO 4,970.1 million in March 2011, while domestic assets increased by 12
percent to RO 4,198.9 million from RO 3,750.1 million during the same period.
CBO’s policy rate for injection of liquidity, i.e. repo rate, which
remained unchanged at 2 percent until February 2012, was reduced to 1 percent
in March 2012 consistent with the LIBOR rate.
Monthly Bulletin February 2012
Investments in government development bonds (GDBs) increased by 39.9 percent to RO 400 million in February 2012 compared to its level a year ago, reflecting new issues of five-year GDBs by the Ministry of Finance worth RO 150 million. Commercial banks’ investments in foreign securities increased by 62.7 percent to RO 326.7 million in February 2012 from RO 200.8 million during the same period last year.
Quarterly Bulletin December 2011
Private sector deposits with commercial banks increased by 11 percent to RO 8,031.3 million in 2011 from RO 7,236.9 million in the previous year. The provisional figure for net profits of commercial banks (domestic operations) stood higher at RO 262.3 million at the end of December 2011 compared to RO 247.7 million a year ago.
* Monthly Bulletin January 2012
* Monthly Bulletin December 2011
* Monthly Bulletin November 2011
The interest rate spread between Rial Omani lending and Rial Omani deposit rates decreased from 5.127 in November 2010 to 4.808 in November 2011 indicating improvement in the competitiveness of the bank intermediation process.
Quarterly Bulletin September 2011
adverse international developments, the
Omani banking sector continued to depict
optimism and resilience during 2011,
consistent with the recovery of the real
economy. According to the latest data
available up to September 2011.
Monthly Bulletin October 2011
The combined balance sheet of commercial
banks indicated modest growth in all major
Monthly Bulletin September 2011
Despite adverse international developments, the
Omani banking sector continued to depict optimism and resilience
during 2011, consistent with the recovery of the real economy.
Monthly Bulletin August 2011
The provisional figures for net profits of commercial banks stood at RO 166.8 million at the end of August 2011 compared to RO 166.1 million at the end of August 2010.
Broad money (M2) increased by 9.7 percent to RO 9,020.4 million in August 2011 compared to RO 8,222.6 million in August 2010.
Quarterly Bulletin June 2011
Looking at the sources of broad money supply (M2),
net foreign assets of the banking system (including CBO)
declined marginally by 1.5 percent to RO 4,893.1 million in June 2011 from RO
4,968.9 million in June 2010, while domestic assets
increased by 27 percent to RO 4,115.4 million at the end of
June 2011 from RO 3,239.4 million a year ago.
Monthly Bulletin July 2011
Monthly Bulletin June 2011
Private sector deposits with commercial banks increased by 6.2 percent to RO 7,381.7
million by the end of June 2011 from RO 6,952.3 million a year ago.
For the first half of the year, provisional figures for
net profits of commercial banks stood at RO 119 million.
Monthly Bulletin May 2011
For the first five months of the year,
provisional figures for net profits
stood higher at RO 113.4 million at the end of May 2011
compared to RO 106.4 million a year ago.
Annual Report 2010
Monthly Bulletin April 2011
Quarterly Bulletin March 2011
Monthly Bulletin March 2011
In respect of domestic
interest rate structure of commercial banks,
both deposit and lending rates softened
during the first quarter of the year. The
weighted average interest rate on RO
deposits (demand, savings & time deposits of
all sectors) declined from 2.096 percent in
March 2010 to 1.509 percent in March 2011.
Discussion paper on
Development Debt market in Oman; A Road Map
Broad money (M2)
increased by 7.5 percent to RO 8,713.3
million in February 2011 compared to RO
8,102.9 million in February 2010. Narrow
money (M1), comprising currency held by the
public and local currency demand deposits,
expanded by 26.5 percent to RO 3,082.9
million on a year-on-year basis in 2011.
Monthly Bulletin Jan 2011
Quarterly Bulletin for December 2010
The banking system in
Oman witnessed modest growth during 2010
consistent with recovery of the real
economy. Gross Domestic Product (GDP) at
current prices increased by 28.3 percent up
to September 2010 in contrast to the
contraction of 27.4 percent witnessed up to
September 2009. GDP emanating from petroleum
and non petroleum sector activities
increased by 54.2 percent and 11.4 percent
respectively during the first three quarters
of 2010. Point-to-point inflation for the
Sultanate stood at 4.2 percent in December
2010, while average inflation was 3.3
percent for the year.
September Quarterly Bulletin
*December Monthly Bulletin
The combined balance
sheet of commercial banks indicated moderate
growth in all major banking aggregates.
Total assets of commercial banks increased
by 10.2 percent to RO 15,647.5 million in
2010 compared to RO 14,198.9 million in 2009
CBO's Regulation BM/REG/38/04/94 on
Marketing Foreign Investment Products
holding investment banking licence, can
market foreign investment products without
seeking prior approval of Central Bank of
November Monthly Bulletin
BANK OF OMAN LAUNCHES THE 38th ISSUE OF
GOVERNMENT DEVELOPMENT BONDS
BY THE AUCTION METHOD
The Central Bank of
Oman hereby announces the new issue of
Government development bonds. The size of
the new issue is fixed at RO 100 million
with a maturity period of 4 years and will
carry a coupon rate of 3.25% p.a. The issue
will be open for subscription from 24th
October to 4th November, 2010 while the
auction will be held on Monday, November 8th
2010. The issue settlement date will be on
11th November, 2010. Interest on the new
bonds will be paid on 11th May & 11th
November, every year until maturity date on
11th November, 2014.
October Monthly Bulletin
Development Bonds- Auction Results - Issue No. 37
BM 1073: Law of Combating Money Laundering
and Terrorism Financing
1073-attachment chapter 1 to 8: Act of
Combating Money Laundering and Terrorism
Decree No. 79/2010: Law of Combating Money
Laundering and Terrorism Financing
Decree No. 79/2010: Law of Combating Money
Laundering and Terrorism Financing (Arabic
Circular to Money Exchange Establishments on
the Law of Combating Money Laundering and
25: Circular to Finance and Leasing
Companies on the Law of Combating Money
Laundering and Terrorism Financing
Central Bank of Oman Annual Report 2009
CBO’s Board of Governors Set Credit Card
Interest Rate Ceiling at 18%-20% p.a
CBO Issues a New
Publication : 2009 Report of Banking Control Departments. Wednesday June 16,2010
highlights the developments and improvement in the regulatory
and supervisory functions of CBO and contains an analysis of
banks performance in the country. The 2009 report also focuses
on the future strategy of regulations and supervision, while
shedding light on the development of the banking sector in the
Sultanate and the evolution of regulatory and supervisory
framework in the Central Bank of Oman.
The publication is aimed at achieving enhanced transparency of
the Central Banking functions while at the same time assisting
the various stakeholders in appreciating the regulatory and
supervisory functions of the Central Bank.
CBO Stipulates Maximum Bank Charges
Central Bank of Oman has decided to
stipulate maximum bank charges effective
from 1st June 2010, in super session of
Circular BM 875 dated 20th October 1999. The
Central Bank’s decision, as stated in
earlier correspondence and in Bankers’
Meeting of 27th April 2010, is in response
to increased number of genuine complaints
from the bank customers and is intended not
to bring uniformity but to provide a
benchmark within which banks need to compete
healthily. Central Bank pointed out that it
has adopted a deregulated approach in
general and follows a consultative process.
Whenever any quantitative parameters are
stipulated, it takes into consideration the
underlying factors. Banks, accordingly, were
requested not to treat bank charges,
insurance premium etc unduly as an extra
source of compensation.
CBO’s Board of Governors Set Credit Card
Interest Rate Ceiling at 18%-20% p.a.
The Central Bank of Oman’s Board of
Governors set a ceiling interest rate of 18%
p.a on salary assigned Credit Card
facilities offered by banks operating in the
Sultanate to their clients and 20% p.a on
others as a maximum limit. The decision was
made in its second meeting of the year
concluded on 16th May 2010 and chaired by H.
E. Dr. Ali bin Mohammed bin Moosa, Deputy
Chairman of CBO’s Board of Governors and
Chairman of the Tender Board.
* BM 1067 Disfiguring of Omani
BM 1066 Forgery of Omani Bank Notes
" Part 2"
1065 Amendments to Circular BM 931 on
BM: 1061 Currency Orders & Deposits
Banking Circulars Booklet Released by
Central Bank of Oman