Bank Nizwa, Oman's first dedicated Islamic bank, has opened its doors to the public to start a new era for banking in the sultanate.
The launch was announced after the release of the Islamic Banking Regulatory Framework by the Central Bank of Oman.
Sayyid Amjad Mohammed Ahmed Al Busaidi, chairman, Bank Nizwa, said: "The Islamic Banking Regulatory Framework, laid down by the CBO has positioned the economy of the nation towards achieving greater success.
"The launch of Bank Nizwa will propel Islamic banking and the economy of Oman to a higher level of development.
Last month, Oman's central bank took a strict approach to regulating Islamic banking in rules for the sector, setting higher standards for the industry than many other countries.
The sultanate announced last year that it would introduce Islamic finance, becoming the last country in the six-nation Gulf Cooperation Council to do so.
The central bank's rules cover areas including banks' liquidity management, the administration of boards of sharia scholars who oversee Islamic financial institutions, and the operation of conventional banks' Islamic windows - and in many cases, the rules appear considerably stricter and more detailed than regulations in other countries.
A major provision is tight restriction of the use of tawarruq as a money market instrument for banks; this is expected to limit banks' flexibility in managing their funds overnight, and could thus raise their costs.
Bank Nizwa also said it will be the first bank in Oman to provide services like account opening through identity cards for Omanis and resident ID cards for expatriates.
Dr Jamil El Jaroudi, CEO Bank Nizwa, said: "We take pride in the fact that we are the first full-fledged Shari'a-compliant bank in the country.
"Our goal is to create an environment that serves as an inspiration for other Islamic banks and Islamic windows at conventional banks to begin operating in Oman so that the customer benefits from the best practices.
(Arabian Business.Com / 11 Jan 2013)
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com