Central Bank of Oman Board of Governors Reviews Economic, Financial Developments in Oman

Muscat: The Board of Governors of the Central Bank of Oman (CBO) convened its second meeting for 2023.

At the outset of the meeting, the Board reviewed statements on major economic and financial developments in the Sultanate of Oman and globally during the recent period, especially the interest rate developments around the world referring mainly to the statement issued this month on CBO keeping interest rate on repurchase operations (repo) unchanged at 5.75%, in line with CBO’s monetary policy. This comes after the US Federal Reserve decided to hold interest rates unchanged. The Board praised CBO’s role in monitoring and following up developments and variables related to the financial and monetary situation in the Sultanate of Oman.

In addition, the Board took stock of the circular on the authorized activities of finance and leasing companies, the launch of phase one of the national platform to verify the procedures of Know Your Customer and Digital Onboarding, as well as the policy of licensing payment service providers. Moreover, the Board praised the efforts on the new national Real Time Gross Settlement System (RTGS), which started actual operation on 18 June 2023. The system operates on a 24/7 basis, and has successfully settled 3,147 transactions amounting to more than RO 409 million on the operating day. The Board also approved HSBC Bank Middle East Limited to open a branch to practice banking operations in the Sultanate of Oman. This is similar to the Board’s previous approval to grant licenses to both Mashreq Bank and Gulf International Bank to each open a branch in the Sultanate of Oman.

The Board also approved Sohar International Bank to open a branch in the Kingdom of Saudi Arabia. The Board also reviewed and approved requests for granting a license for the activity of the Payment Service Provider (PSP) to Salis Pay, the Global Money Exchange Company, and FRIENDI Pay. Additionally, the Board reviewed the request for the establishment of a new investment bank under the name (Oman Investment Bank). The Board decided to approve the request, provided that the relevant requirements and conditions are fulfilled.

Moreover, the Board discussed a number of studies related to the banking sector in the Sultanate of Oman, the most important of which are: a study on indicators of the interest rate cap on personal loans, and the performance of licensed PSPs.

The Board also took stock of a number of reports on indicators of financial soundness of banks, the positive position of reserves and the good performance of CBO foreign investments. In addition, the Board reviewed the financial position of CBO, together with the semi-annual report on the project to enhance the efficiency of monetary policy, a report on the prospects and challenges of stability in the Omani economy and the announcement issued by the CBO regarding the development of a methodology for calculating an index that measures the degree of financial stability in the Sultanate of Oman.

This is in addition to discussing other topics, on which the Board took appropriate decisions.