Latest news with #CentralBankofOman
Zawya
2 days ago
- Business
- Zawya
Digital banks in Oman get green-light from CBO
MUSCAT - The Central Bank of Oman (CBO) has issued a regulatory framework for the licensing and supervision of digital banks, marking a major step toward modernising the country's financial sector. The framework, which came into effect on June 1, 2025, is aligned with Oman Vision 2040. The framework allows digital banks to operate as either locally incorporated joint-stock companies (SAOC or SAOG) or as branches of foreign banks, subject to regulatory approval in their home jurisdictions. Two types of licenses will be offered. Category 1 requires a minimum paid-up capital of RO 30 million and allows full operations. Category 2 requires RO 10 million but comes with business limitations, including caps on customer deposits and corporate lending, and a prohibition on proprietary trading. These limits are waived during the first two years of operation. All digital banks must maintain a physical head or registered office in Oman. They may open administrative offices for customer support, but not traditional branches for transactions. Shareholding limits apply: individuals and their affiliates may hold up to 15 percent of voting shares; corporate bodies up to 25 percent; and holding companies up to 35 percent. Cross-ownership in multiple banks is restricted to 15 percent. Applicants must present a detailed five-year business plan covering digital services, target segments, profitability projections, and a financial inclusion strategy. The plan must outline IT architecture, cybersecurity readiness, and disaster recovery procedures. Digital banks are expected to adopt modern technologies such as AI, open banking, blockchain, and cloud computing. Omanisation targets start at 50 percent and rise to 90 percent by Year 5. The CBO mandates the submission of an exit plan alongside the license application. It must define conditions under which the bank would voluntarily cease operations, such as capital or profitability deterioration. The plan should address customer protection, risk triggers, and exit funding without regulatory assistance. Licensed digital banks must comply with the Banking Law 02/2025, National Payment Systems Law 08/2018, and AML Law 30/2016. They are also subject to digital onboarding rules, cybersecurity frameworks, consumer protection regulations, and fraud prevention protocols. The CBO may require independent technical assessments at the applicant's expense. Non-compliance could trigger enforcement measures, including license revocation. The CBO reserves the right to reject incomplete applications or withdraw approvals if information is found to be inaccurate.
Observer
2 days ago
- Business
- Observer
IMF praises Oman's economic progress and fiscal discipline
MUSCAT: A visiting International Monetary Fund (IMF) mission has concluded its preliminary meetings with the Government of Oman as part of the 2025 Article IV Consultation. The discussions focused on recent economic, financial, and monetary developments, as well as structural reform progress in the Sultanate of Oman. The IMF commended Oman's economic performance, noting that real GDP grew by 1.7% in 2024—up from 1.2% in 2023—thanks to robust non-oil sector growth, particularly in manufacturing, logistics, tourism, and renewable energy. Growth is forecast to accelerate to 2.4% in 2025 and 3.7% in 2026, supported by the easing of OPEC+ production caps and ongoing economic diversification. Inflation remains well contained at just 0.9% year-on-year for the first four months of 2025. The Fund lauded Oman's prudent fiscal policy, which delivered a 3.3% budget surplus in 2024 despite rising infrastructure and public service investments. However, the surplus is projected to narrow to 0.5% of GDP in 2025 and 2026 due to lower oil prices, before improving again in the medium term. Public debt fell to 35.5% of GDP in 2024. The IMF highlighted Oman's continued fiscal reform momentum and targeted investments in priority sectors, praising the Oman Investment Authority's role in enhancing governance of state-owned enterprises. Oman's banking sector was described as strong, with high asset quality, solid capital and liquidity buffers, and sustained profitability. Credit to the private sector continues to expand, fueled by growing deposits and healthy net foreign assets. The Central Bank of Oman received praise for improving liquidity management and promoting financial sector development and inclusion. The external sector also showed strength, posting a current account surplus of 2.2% of GDP in 2024. A temporary deficit is expected in 2025–2026 due to softer oil prices and non-oil exports, but a return to surplus is anticipated as oil output rises. The IMF also welcomed progress in structural reforms, including tax system modernization and the Future Fund's success in attracting private investment. Ongoing investments in green hydrogen and renewables were also highlighted as key pillars of the Eleventh Five-Year Plan (2026–2030) and Oman Vision 2040. The Central Bank of Oman expressed appreciation for the IMF's assessment and reaffirmed its commitment to financial stability and a sustainable, diversified economy. — ONA
Observer
2 days ago
- Business
- Observer
Digital banks in Oman get green-light from CBO
MUSCAT, JUNE 3 The Central Bank of Oman (CBO) has issued a regulatory framework for the licensing and supervision of digital banks, marking a major step toward modernising the country's financial sector. The framework, which came into effect on June 1, 2025, is aligned with Oman Vision 2040. The framework allows digital banks to operate as either locally incorporated joint-stock companies (SAOC or SAOG) or as branches of foreign banks, subject to regulatory approval in their home jurisdictions. Two types of licenses will be offered. Category 1 requires a minimum paid-up capital of RO 30 million and allows full operations. Category 2 requires RO 10 million but comes with business limitations, including caps on customer deposits and corporate lending, and a prohibition on proprietary trading. These limits are waived during the first two years of operation. All digital banks must maintain a physical head or registered office in Oman. They may open administrative offices for customer support, but not traditional branches for transactions. Shareholding limits apply: individuals and their affiliates may hold up to 15 percent of voting shares; corporate bodies up to 25 percent; and holding companies up to 35 percent. Cross-ownership in multiple banks is restricted to 15 percent. Applicants must present a detailed five-year business plan covering digital services, target segments, profitability projections, and a financial inclusion strategy. The plan must outline IT architecture, cybersecurity readiness, and disaster recovery procedures. Digital banks are expected to adopt modern technologies such as AI, open banking, blockchain, and cloud computing. Omanisation targets start at 50 percent and rise to 90 percent by Year 5. The CBO mandates the submission of an exit plan alongside the license application. It must define conditions under which the bank would voluntarily cease operations, such as capital or profitability deterioration. The plan should address customer protection, risk triggers, and exit funding without regulatory assistance. Licensed digital banks must comply with the Banking Law 02/2025, National Payment Systems Law 08/2018, and AML Law 30/2016. They are also subject to digital onboarding rules, cybersecurity frameworks, consumer protection regulations, and fraud prevention protocols. The CBO may require independent technical assessments at the applicant's expense. Non-compliance could trigger enforcement measures, including license revocation. The CBO reserves the right to reject incomplete applications or withdraw approvals if information is found to be inaccurate.
Observer
2 days ago
- Business
- Observer
Digital banks get green light in Oman
MUSCAT: The Central Bank of Oman (CBO) has issued a regulatory framework for the licensing and supervision of digital banks, marking a major step toward modernising the country's financial sector. The framework comes into effect on June 1, 2025, and is aligned with Oman Vision 2040. The framework allows digital banks to operate as either locally incorporated joint-stock companies (SAOC or SAOG) or as branches of foreign banks, subject to regulatory approval in their home jurisdictions. Two types of licenses will be offered. Category 1 requires a minimum paid-up capital of OMR 30 million and allows full operations. Category 2 requires OMR 10 million but comes with business limitations, including caps on customer deposits and corporate lending, and a prohibition on proprietary trading. These limits are waived during the first two years of operation. All digital banks must maintain a physical head or registered office in Oman. They may open administrative offices for customer support, but not traditional branches for transactions. Shareholding limits apply: individuals and their affiliates may hold up to 15 percent of voting shares; corporate bodies up to 25 percent; and holding companies up to 35 percent. Cross-ownership in multiple banks is restricted to 15 percent. Applicants must present a detailed five-year business plan covering digital services, target segments, profitability projections, and a financial inclusion strategy. The plan must outline IT architecture, cybersecurity readiness, and disaster recovery procedures. Digital banks are expected to adopt modern technologies such as AI, open banking, blockchain, and cloud computing. Omanisation targets start at 50 percent and rise to 90 percent by Year 5. The CBO mandates the submission of an exit plan alongside the license application. It must define conditions under which the bank would voluntarily cease operations, such as capital or profitability deterioration. The plan should address customer protection, risk triggers, and exit funding without regulatory assistance. Licensed digital banks must comply with the Banking Law 02/2025, National Payment Systems Law 08/2018, and AML Law 30/2016. They are also subject to digital onboarding rules, cybersecurity frameworks, consumer protection regulations, and fraud prevention protocols. The CBO may require independent technical assessments at the applicant's expense. Non-compliance could trigger enforcement measures, including license revocation. The CBO reserves the right to reject incomplete applications or withdraw approvals if information is found to be inaccurate. The new framework is expected to pave the way for digital-first banking models, improve access to finance, and foster innovation in Oman's financial sector.
Arab News
4 days ago
- Business
- Arab News
Oman's banking sector credit rises 9% to $87.3bn
RIYADH: Total outstanding credit extended by Oman's banking sector, comprising both conventional and Islamic institutions, rose by 9 percent year-on-year to 33.6 billion Omani rials ($87.3 billion) at the end of April, according to new data. According to the Central Bank of Oman, private sector credit rose by 7 percent to 27.8 billion rials. Non-financial corporations held the largest share at 46.6 percent, followed closely by the household sector at 44 percent. Financial corporations held 5.6 percent, while other sectors represented the remaining 3.7 percent. Deposits across the banking system also showed robust growth. 'Total deposits held with ODCs (other depository corporations) registered a YoY significant growth of 9.3 percent to reach 32.8 billion Omani rials at the end of April 2025,' the report stated. Of this, private sector deposits reached 21.5 billion rials, a 7.1 percent increase from the previous year. Household deposits contributed the largest share at 50.3 percent, followed by non-financial corporations at 30.4 percent, financial corporations at 17 percent, and other sectors at 2.3 percent. Credit extended by conventional banks grew by 7.9 percent to 21.3 billion rials, while their aggregate deposits increased by 6.1 percent to 25.7 billion rials. The banking sectors across the Gulf Cooperation Council countries have demonstrated credit growth, reflecting the region's economic resilience and strategic investments. In Saudi Arabia, outstanding credit facilities reached SR2.96 trillion by the end of the fourth quarter of 2024, marking a 14.4 percent year-on-year increase. However, Qatar's banking sector saw a slight contraction, with total credit facilities declining by 0.2 percent to 1.4 trillion Qatari riyals, primarily due to reduced lending to the public sector and consumption. Oman's private sector deposits with conventional banks rose 4.5 percent to 16.8 billion rials in April. Investments in government development bonds increased by 6.2 percent to 2 billion rials, whereas holdings in foreign securities declined by 3.7 percent to 2.1 billion rials. Islamic banks and windows also demonstrated strong performance. Their total assets increased by 18.1 percent to 8.9 billion rials, accounting for 19.6 percent of the total banking assets. Financing provided by these entities reached 7.2 billion rials, marking a 13.5 percent annual increase. Total deposits held by Islamic banks and windows increased by 22.6 percent to 7.1 billion rials. Broad money supply grew 7.5 percent to 25.4 billion rials, driven by a 12 percent rise in narrow money and a 6 percent increase in quasi-money components. Currency held by the public rose by 7.5 percent, while demand deposits expanded by 16.8 percent. Interest rate trends showed mixed movements. The weighted average interest rate on deposits with conventional banks rose to 2.594 percent in April, up from 2.580 percent a year earlier. Meanwhile, the weighted average lending rate fell to 5.555 percent from 5.604 percent. The overnight domestic interbank lending rate dropped to 4.392 percent, down from 5.212 percent the previous year, reflecting a decrease in the central bank's repo rate to 5 percent in line with US monetary policy trends. Oman's nominal gross domestic product increased by 1 percent yea on year in the fourth quarter of 2024, driven by a 4.1 percent expansion in the non-hydrocarbon sector. Real GDP rose by 1.7 percent, supported by 3.9 percent growth in non-hydrocarbon activities. The average oil price stood at $75.9 per barrel at the end of April, 5.2 percent lower than a year earlier. Average daily oil production was 986,700 barrels, reflecting a 1 percent decline. Consumer price inflation remained subdued at 0.9 percent year on year as of April.
