Hawzah News Agency- The progress of Islamic banking in the country came up for discussion at a session attended by top banking officials and members of the Majlis A'Shura.

At the discussion, Islamic banks were represented by alizz Islamic bank and Bank Nizwa, while conventional banks were represented by their Islamic windows - Meethaq (Bank Muscat), Muzn (National Bank of Oman), Sohar Islamic (Bank Sohar) Hilal (Ahlibank), Al Yusr (Oman Arab Bank), and Maisarah (Bank Dhofar).

Dr Ashraf al Nabhani, general manager of corporate support, Bank Nizwa, called for the financial system to protect Islamic banks. He said competition from traditional banks was “unequal”.

Islamic banks also suffer because personal loans cannot be transferred from conventional banks, according to officials.

However, a top Central Bank of Oman (CBO) official said Islamic banks have made “excellent” progress since they were introduced in 2012. According to CBO data cited by bank representatives, Islamic banking's market share has increased from 5.1 per cent in 2015 to 7.8 per cent through March 2016.

Saud al Busaidi, CBO director of Islamic banking, said the percentage was “an achievement”. He favorably compared Omani Islamic banks to places like Malaysia, where after a long history, Islamic banks' share still does not exceed five per cent.

“In these three years, I think solutions have been found for many challenges,” he said. 

Busaidi admitted the main challenge for Islamic banks was in managing liquidity, but said the CBO would “soon” unveil a plan to help Islamic banks find investment tools. Majlis A'Shura organized the discussion to help raise awareness about Islamic banking in Oman and identify the challenges they face.

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