| Zadjali asks Islamic bankers to launch services carefully |
Hashim Al Hashmi
MUSCAT HE Hamoud Bin Sangour Al Zadjali, Executive President of Central Bank of Oman, urged all Islamic banks and commercial banks, which plan to set up separate branches to provide Islamic banking service in accordance with Sharia, to be careful and take necessary precaution before implementing the same as these service are new in the Sultanate.
The launching of Islamic banking will be an addition to existing banking service provided by the commercial banks, and this will increase deposit, credit and profitability of banks, he said in an interview to Oman Tribune.
Personal loans occupy about 41 per cent of the total credit extended by banks and the outstanding personal loans stood at 5605.80 million rials at the end of June 2012, he added.
Regarding amendments to the banking law and the date of issuing regulations on Islamic banking, he said the Board of Governors of the CBO reviewed the legal set up for banking in the Sultanate and decided to make amendments in the Banking Law issued via Royal Decree no. 114/2000 related to Islamic banking.
“To achieve this, we have conducted a number of seminars and workshops on Islamic banking in coordination with various government agencies. Moreover, we invited foreign experts with long experience in the field for the seminars and they delivered lectures on the subject,” he said.
When queried about the merger between Oman International Bank and HSBC, he said the merger is a good idea and this will create one of the largest and powerful banking entities. This will also increase their competitiveness in the era of globalisation.
There were instances of many successful mergers between national banks in the Sultanate in the past. This happened mainly due to social and economic factors, technical developments in the field and many other advantages, he added.
The merged banks were able to increase the number of branches, their capitals and the net asset value.
According to available statistics, the average capital adequacy ratio of the commercial banks is 15.9 per cent of the total risk-weighed assets at the end of 2011, compared to the ratio set by the CBO of 12 per cent, he said.
OMAN TRIBUNE
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