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Tuesday, 14 April 2015

Oman: Bank Nizwa chief executive highlights Islamic banking potential

Bank Nizwa participated in the College of Banking and Financial Studies (CBFS) Symposium, discussing the emerging challenges and future growth of the Islamic banking industry in the Sultanate.

In addition to sitting on a panel discussion on the 'Prospects and Challenges Facing Islamic Banking in Oman', the CEO of Bank Nizwa, Dr Jamil El Jaroudi, delivered the sole presentation of the symposium shedding light on the journey of Islamic banking to date in Oman, its current status and future projections. 

Addressing government policy makers, research scholars, industry professionals and students, El Jaroudi said, "Islamic banking saw  33 per cent and 27 per cent in financing and deposits respectively in 2014 incremental increase of the entire banking sector."

"In order to maintain this momentum, we need to focus on overcoming both internal and industry challenges, including constraints in liquidity management, the lack of standardisation in products and services, the availability of qualified professionals, as well as the limitations posed by the relatively low levels of customer awareness on Islamic banking and the added-value it brings to individuals, local communities and the national economy," he added.

Explaining the banking landscape in Oman, El Jaroudi highlighted the competitive edge that conventional banks enjoy in comparison to Islamic banks, given their well-established networks, brand visibility and operational scales of efficiency.

He further outlined how these propositions support the operations and growth of Islamic windows as they leverage on the existing customer base and infrastructure of their parent organisation; while fully-fledged Islamic banks require time to build their network and promote their products, services and name. 

As of December 2014, the market in Oman includes two full-fledged Islamic banks and six Islamic windows of conventional banks, with a network of 46 branches in total. In light of the recent formation of the High Sharia Supervisory Authority, Dr El Jaroudi highlighted four key areas to consider in order to inspire organic growth within the industry, including products, people, market place and the regulatory environment. 

According to El Jaroudi, the first area focuses on the introduction of products that can compete with their conventional counterparts, such as equity financing, liquidity management and Sukuk. As for people, this area is centred on attracting qualified and experienced professionals and retaining them.

He characterised the market place, as a catalyst for attracting investors to utilise Islamic banking products and services to sustainably grow their businesses. As for the regulatory environment, it emphasises the need to have common ground between Sharia and civil regulations in order to achieve the industry's long-term goals.

Joining Dr El Jaroudi in representing Bank Nizwa during the symposium was Dr Ashraf Al Nabhani, General Manager Corporate Support, who took part in a panel discussion entitled 'Impact of Islamic Finance on Economic Growth'.

The panel also featured Prof. Abbas Mirakhor, a distinguished scholar who is the First Holder of the International Centre for Education in Islamic Finance (INCEIF) Chair of Islamic Finance.

Based in Malaysia, INCEIF is the only university globally dedicated to offering academic and professional qualifications in Islamic finance.

Bank Nizwa's participation in the symposium came as part of its ongoing strategy to continue raising awareness on Islamic banking across the Sultanate. The Bank has been collaborating with CBFS, supporting its program in Islamic banking through workshops for first year students, introducing them to the industry, its impact on the economy and most importantly highlighting available career opportunities.

(Times Of Oman / 13 April 2015)
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