Islamic banking grows 5.2 per cent in Oman

MUSCAT: The Central Bank of Oman (CBO) affirmed that the Government Development Bonds (GDB) issued in February is drawing significant investment interest with the subscription coverage ratio currently at 138 per cent which indicates investor confidence in this type of low-risk investment. This was stated by Hamoud bin Sanjour al Zadjali, Executive President of CBO, in an interview with Oman, sister publication of the Observer.

He said that the subscription is open for banks, financial institutions and individuals. The apex bank is expected to issue sovereign bonds in the middle of this year in accordance with the bond issue mechanisms and in agreement with the ministries and other entities.

The role of the CBO is to issue government debt instruments as an agent or manager of the bond issue with regard to the development bonds to enable all Islamic banking windows to get involved in the funding of large projects. “These bonds allow Islamic banking in the Sultanate to open new horizons and provide opportunities for financing,” Al Zadjali said.

“The central bank has regulated the Islamic banking windows by using a framework for organisation and oversight in line with the best international practices adopted in this field, including accepting domestic and foreign deposits and investments in firms, therefore, this framework doesn’t involve any restrictions on deposits received from Islamic banks operating abroad,” Al Zadjali said, adding that the Islamic banking has grown by 5.2 per cent by the end of 2014.

SOURCE: OMAN DAILY OBSERVER

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