Challenges for Islamic Banking in Oman

12
Challenges for Islamic Banking in Oman

description

Challenges for Islamic Banking in Oman. AGENDA. Strength of Islamic Banking in Oman Legal Reforms Products Development Pioneer of Islamic Banking. Strength of Islamic Banking in Oman. Components of IBRF. Challenges of Islamic Banking i n Oman. System and Controls. - PowerPoint PPT Presentation

Transcript of Challenges for Islamic Banking in Oman

Page 1: Challenges  for Islamic Banking  in Oman

Challenges for Islamic Banking

in Oman

Page 2: Challenges  for Islamic Banking  in Oman

Strength of Islamic Banking in Oman Legal Reforms Products Development Pioneer of Islamic Banking

AGENDA

Page 3: Challenges  for Islamic Banking  in Oman

Strength of Islamic Banking in Oman

CBO’s Objectives

Credible Banking

Proposition

Customer Protection

Efficient Mobilization of

Capital

Effective Regulatory Oversight

Inclusion of Shariah Sensitive Market Segment

Compliance with International Best Practices

Page 4: Challenges  for Islamic Banking  in Oman

Components of IBRF

Licensing Requirements •Capital Allocation•Set up/ Policy requirements

Sharia Governance Framework

•SSB / Sharia Reviewer•Fit & Proper criteria

Window Model •Bank within bank•Direction for business, control & support units

Risk Management •Capital adequacy ratio•Liquidity Management

Accounting & Reporting Framework

•AAOIFI standards•IFRS conflict disclosures

Page 5: Challenges  for Islamic Banking  in Oman

Challenges of Islamic Bankingin Oman

Page 6: Challenges  for Islamic Banking  in Oman

Funds Segregation Challenge

CBO Framework

Sharia Framework

Business Ethics

Corporate Governance

Fundamentals

Funds Segregation Assurance

IT System Separate Book

External/ Regulator’s

Audit

Funds Segregation

Policies

IIFM, AAOIFI & IFSB

Sharia Inspection

ALM Guidelines

S y s t e m a n d C o n t r o l s

Page 7: Challenges  for Islamic Banking  in Oman

Government patronage and regulatory reforms can play a pivotal role for the development of Islamic banking like taxation benefits

Provision in Commercial codes for Islamic Banking to ensure enforceability of contract in courts like trust laws, beneficial ownership

Level playing field between Islamic and conventional banks in term of products commercial viability e.g. double taxation issues

Sharia Compliance Re-assurance via Centralized Sharia Board

Challenge of Regulatory Reforms

Page 8: Challenges  for Islamic Banking  in Oman

Need of standardization of contracts for Islamic products. Public perception management Lack of Research and Development efforts Next Generation of Islamic banking products instead of

mimicking conventional banking

Challenges in Product Development

Page 9: Challenges  for Islamic Banking  in Oman

Pioneer of Islamic Bankingin Oman

Page 10: Challenges  for Islamic Banking  in Oman

Started operations in 2008 First mortgage product of Oman Total portfolio is over RO 90 Mio Total Meethaq customers are over 2000 Majority of the customers are first time

borrowers Pioneer of Islamic Banking in Oman

Meethaq Home Finance

Page 11: Challenges  for Islamic Banking  in Oman

Market Leadership Initiatives

Support to CBO/CMA Ifta

Office

First Product in Oman

Public Awareness Programs/ Facebook

Initiatives on MM & CM

Page 12: Challenges  for Islamic Banking  in Oman

Thank You