Central Bank of Oman announced that ‘Basel III' accord, the global regulatory standards on bank capital adequacy, stress test and market liquidity risk, will be introduced for Omani banks next year. “A road map has already been finalized and revised rules shall accordingly be finalized by December 2012 and implementation in 2013 onwards in accordance with the timeline set under Basel III," said Hamoud Sangour Al Zadjali, Executive President of CBO. The third Basel accord was developed in response to the deficiencies in financial regulation revealed, in the aftermath of the global financial crisis. The CBO chief also said that the advent of Islamic banking through new banks and windows of existing banks will, no doubt, add to the size and diversity of banking operations in Oman. The banking industry in Oman is committed to commencement of Islamic banking in a very enthusiastic manner. Formal legal and other authorizations are expected shortly. The CBO will continue to urge that productive/growth-oriented finance needs should be given top priority. “Good amount of capital is expected to be earmarked for the healthy growth of Islamic banking business with two new banks alone coming up with capital of RO250 million." Oman banking sector has done well over the years. Even the financial crisis elsewhere did not affect it much and growth has been sustained. In 2011, assets have grown by 17 per cent, deposits by 19 per cent and credit by 16 per cent. With regulatory capital of over RO2.6 billion, capital adequacy ratio of 15.9 per cent, proposed retained earnings and right and other issues along with ample liquidity available in the system, there is no doubt that banks in Oman are well prepared to meet the credit needs of the growing economy. Oman banks have been active in international markets. In terms of long term funding sourcing, they have no difficulties in mopping up required additional resources. Banks have been freely able to tap long term CDs and bonds locally. “Project funding will continue to receive due attention," Times of Oman reported.
