The draft rules exclude commodity Murabaha and Tawrruq, two common market tools.
"The Central Bank was careful to ensure Islamic finance is of high standards," Mohammad Haris, Head of Islamic banking at Bank Sohar is quoted by Reuters as saying. "Certain areas, we believe, are too stringent such as liquidity management."
Omani bankers are said to be arguing that Oman's Islamic money market will be too shallow and undeveloped for them to access conveniently without using Tawarruq.
Banks have been lobbying regulators, asking that Tawarruq be made temporarily permissible until the market can develop other solutions, Reuters reported bankers as saying.
Oman's Central Bank told Reuters that the Islamic banking law was still being drafted, and would not comment on Tawarruq.