The total assets of Islamic banks and windows combined amounted to 3.1 billion rials as at the end of 2016, constituted 10.3 per cent of the banking system assets, according to the CBO annual report.
An important turning point in the Sultanate’s banking sector was the introduction of Islamic banking since December 2012. Currently, two full-fledged Islamic banks and six local conventional banks with separate dedicated windows have been established for offering Islamic banking products. All these institutions have their own Sharia Supervisory Boards to guide them, the report says.
As part of strengthening the regulatory framework, a High Sharia Supervisory Board was established in the CBO involving eminent scholars. The functions of the board include giving opinion and advice to CBO on Sharia matters and deciding on issues which are subject of dispute in Sharia Supervisory Boards in licensed banks.
The CBO regularly interacts with the Islamic Financial Services Board (IFSB), an international standard-setting organisation for the Islamic banking industry. It is widely acknowledged that the prudential standards and guiding principles of IFSB enhances the soundness and stability of the Islamic financial services industry.
This is particularly relevant as the market share of Islamic banking in the Sultanate is increasing.