Hamood Sangour al Zadjali, Executive President, Central Bank of Oman, while inaugurating a workshop on Islamic Banking (October 8), organised by Crowe Horwath Oman, said: ‘this will help in creating awareness, understanding knowledge in Islamic Banking and is timed well on the eve of formal commencement of Islamic Banking in Oman.
The Central Bank has made out a draft Islamic Banking Regulatory framework which will provide a comprehensive working platform based upon sound and best practices, “he added.
The meeting was also addressed by Abdullah al Salmi, Executive President, Capital Market Authority. Al Salmi narrated the steps being taken by the CMA towards the smooth licensing of Takaful Insurance. He said that the draft regulations are placed with the experts for their comments before finalising.
Earlier Davis Kallukaran, Managing Partner Crowe Horwath Oman, welcomed the gathering.
Klaus Baur-Mitterlehner, Member, Board of Directors, Crowe Horwath International delivering the key note address remarked that Crowe Horwath is keenly watching the progress in the development of Islamic Banking in Oman. "We have identified the depth of the market and accordingly has gathered our experts on the topic in Oman to discuss the ways and means of providing services to this emerging Industry, Being the nascent stage right from the regulators to the investors and business men ,issues and challenges are likely to arise and we can provide the solutions”, he added.
Guest speaker Suleiman al Harthy, Head of Islamic Banking — bank muscat, shared his experience through a presentation on ‘Islamic Banking Implementation Challenges’.
Later Amarjeet Majumdar, Partner Business Advisory Services of Crowe Horwath Oman, moderated a panel discussion of Crowe Horwath Islamic banking and finance experts. The panel consisted of Crowe Horwath members Klaus Bauer-Mtterlehner from Austria, Pauline Abdullah from Malaysia, Abdelhak El Kafsi from Bahrain, Mohamed Okbi from Saudi Arabia, Farooq Ladha from UAE. The inaugural Session concluded with a closing address and vote of thanks from Muna Bint Abdullah Al Ghazali, Founding Partner Crowe Horwath Oman.
Key challenges facing Islamic banks world over are availability of legal and regulatory framework and Shariah interpretations based on prevalent Fiqh Al Islamic remarked Farooq Ladha, Middle east tax partner of Horwath Mak. He said that the Availability of Shariah experts and consultants to advise them to ensure compliance in the operations and activities of the bank with Shariah principles are required”.
According to Pauline Abdullah from Malaysia, challenges include Islamic financial product’s development and execution as Shariah compliant products lead to additional time, greater product complexity, higher subject knowledge and objective skill requirements and more onerous documentation in relation to conventional banking, competition from conventional banking are other challenges being faced by the Industry. Islamic banks have shown a tendency of having very high level of liquid and secure investments in Islamic financial products which results in very low yields she added.