Muscat: The recent Royal Decrees concerning the establishment of a new board for the Central Bank of Oman and the appointment of its governor are designed to enhance the legal and regulatory framework necessary for addressing the demands of a contemporary financial system.
Over the past twenty years, the banking sector in the Sultanate has experienced significant advancements, necessitating a thorough revision of legislative frameworks to keep pace with the swift evolution of banking and financial services. This evolution aims to facilitate the integration of digital innovations and technologies into financial and banking operations.
These changes are encapsulated in the new banking law, which governs banking operations and the Central Bank of Oman (CBO) through two key regulations. The first regulation pertains to the governance of the CBO as part of the state's administrative structure, while the second focuses on the regulation of banking operations and both financial and non-banking activities.
The banking law comprises 241 articles, articulated using modern legislative techniques that prioritize clarity in legal language, making it accessible for both professionals and the general public to comprehend and apply.
Chapter 1 of the new banking law outlines definitions and general provisions, while Chapter 2 addresses the responsibilities and operational mechanisms of the CBO, including monetary policy and cash management. Chapter 3 focuses on the regulation of national currency issuance by the CBO.
Subsequent chapters of the law promote the attraction of both local and foreign investments in the banking sector and regulate Islamic banking practices. They also introduce new concepts such as digital banks, financial technology, and other emerging financial services.
The legislation emphasizes the importance of safeguarding the rights of customers and consumers within the banking sector and other financial services.
The Central Bank of Oman (CBO) system, established by Royal Decree No. 3/2025, outlines the governance and operational framework of the CBO as detailed in Article 21, which provides the legal basis for its regulation.
Additionally, the CBO system aims to promote monetary stability and ensure the security of banks and financial institutions, while enhancing the CBO's role in supporting Oman’s vision for sustainable economic development.
The provisions also address the responsibilities of the CBO, including the issuance of the national currency, maintaining its value, formulating monetary policies, and overseeing licensed financial and banking operations.
Prior to this legislation and system, the law concerning the protection of banking deposits was enacted under Royal Decree No. 47/2024.
