New banking laws made to meet digital innovation

19/03/2025 06:13 AST

The Royal Decrees related to the formation of a new board of Central Bank of Oman and appointment of its governor are aimed at boosting the legal and regulatory framework for meeting the modern financial system requirements.

The Sultanate's banking sector has seen remarkable developments during the past two decades which required comprehensive revision of the legislative systems to keep abreast with the rapid changes in the banking and financial businesses to allow utilisation of the digital innovation and technology for financial and banking services.

These developments are reflected in the new banking law in the form of regulation of the banking work and the CBO in two regulations; the first related to the CBO governance as one of the units of the administrative apparatus of the state and the second related to the regulation of the banking work and the financial and non-banking activities.

The banking law consists of 241 articles rephrased in accordance with the state-of-the-art legislative methods, which rely on the clarity of the legal text to make easy for the specialised persons and the public understand the texts and their implementation.

Chapter 1 of the new banking law deals with the definitions and the general rules/provisions while chapter 2 deals with the responsibilities and the work mechanisms of the CBO including the monetary policy and cash management. Chapter 3 dealt with regulating issuance of the national currency by the CBO.

The other chapters of the law tackles the provisions encouraging attraction of local and foreign investments in the banking sector and regulation of the Islamic banking business. They also handle new concepts such as the digital banks and financial technology and other financial services established.

The law stresses the significance of protection of the rights of customers and consumers of financial services in the banking sector and other financial activities.

The CBO system issued by Royal Decree No. 3/2025 regulates the CBO work and governance by article ( 21 ) which formed the legal framework for regulating the same.

The provisions of the CBO system also aims to achieve cash stability and t ensure the safety of the banks and financial institutions along with boosting the role of the CBO in achieving Oman vision for sustainable economic development.

The provisions also deals with the CBO prerogatives such as issuance of the national currency, preserving the value of the currency, setting the cash policies, supervising on the licensed financial and banking activities.

The law on protection of the banking deposits was issued prior to the above law and system by Royal Decree No. 47/2024.

Times of Oman