Oman strengthens banking laws to drive financial innovation
MUSCAT: The Sultanate of Oman has taken a significant step in modernising its financial sector with the issuance of Royal Decree No (2/2025) on the Banking Law and Royal Decree No (3/2025) on the Central Bank of Oman (CBO) System.
These legislative changes coincide with the appointment of a new CBO Governor and Board of Directors, reinforcing efforts to enhance the legal and regulatory framework governing the financial system. The reforms aim to ensure the sector remains resilient, adaptable and aligned with international banking developments.
Over the past two decades, Oman's banking industry has undergone substantial growth, making it necessary to update its legislative structure to keep pace with digital transformation and emerging financial services.
The new Banking Law, comprising 241 articles, is designed to improve regulatory clarity, enhance transparency and foster financial inclusion. It introduces measures to strengthen the governance of the Central Bank of Oman, outlining its responsibilities in implementing monetary policy, managing liquidity and maintaining financial stability.
The law also affirms the CBO's exclusive authority over currency issuance, ensuring that national currency regulations align with global financial advancements.
One of the major updates in the Banking Law is its focus on attracting foreign investment and expanding banking operations.
The revised regulations simplify procedures for foreign banks entering the Omani market while granting financial institutions greater flexibility in investment and credit activities.
This includes enhanced support for small and medium-sized enterprises, facilitating access to financing for local businesses and large-scale projects. The law also dedicates a chapter to Islamic banking, introducing provisions that eliminate multiple taxes and fees on real estate and movable assets, making Sharia-compliant finance more attractive.
Recognising the rapid evolution of digital finance, the new law paves the way for digital banks, financial technology (fintech) solutions, crowdfunding platforms and open banking applications. By easing regulatory requirements, Oman aims to encourage innovation in banking services while promoting financial inclusion.
Additionally, the law reinforces consumer protection, emphasising transparency in service pricing, fairness in banking transactions and stricter safeguards for customer data privacy.
The governance framework for the Central Bank of Oman has also been restructured under Royal Decree No (3/2025), which outlines the bank's core objectives through a set of 21 articles.
These objectives include ensuring monetary stability, overseeing banking and non-banking financial institutions, enforcing financial regulations and maintaining the overall safety of the financial system.
The new framework enhances the CBO's role in supporting Oman's long-term economic development, in line with the nation's broader financial and investment goals.
These reforms build on Royal Decree No 47/2024, which introduced the Bank Deposit Protection Law to safeguard depositor funds and bolster confidence in the financial sector.
These legislative measures establish a robust, transparent and investor-friendly banking environment, positioning Oman as a stable financial hub in the region while ensuring sustainable economic growth. — ONA
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