The Central Bank of Oman (CBO, ar, البنك المركزي العماني) was established in December 1974 and began operations on 1 April 1975. It replaced the Oman Currency Board as the principal currency authority in Oman. Currently it is headed by Taimur bin Asaad bin Tariq al-Saeed. The Central Bank of Oman is responsible for maintaining the stability of the national currency the Omani Rial and ensuring monetary and

financial stability Financial stability is a property of a financial system that dissipates financial imbalances that arise endogenously in the financial markets or as a result of significant adverse and unforeseeable circumstances. When stable, the system absorbs ...

in a deregulated and open financial system. The capital base of the CBO which was one million Omani Rials at the commencement of operations in 1975, was strengthened over time and since April 2002 has remained at R0300 million. At the end of 2005, CBO's assets/liabilities totalled RO 1826.4 million. The Omani

banking system A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Becaus ...

has experienced several mergers since the 1990s and as a result the number of

commercial bank A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit. It can also refer to a bank, or a division of a large bank, which deals with co ...

s at the end of 2005 stood at 13, of which five are locally incorporated and eight are branches of foreign banks, together having a branch network of 329 branches. Local banks, in addition, have 10 branches and one representative office abroad. As at the end of 2005, there were also three specialised banks in operation, with a network of 26 branches. The CBO has approved the establishment of an additional local bank (Sohar Bank) and a branch of a foreign bank (Bank of Beirut) that are expected to commence operations by the end of 2006. To strengthen the financial position of licensed banks and enable them to face competition as well as finance large projects, the minimum

capital requirement A capital requirement (also known as regulatory capital, capital adequacy or capital base) is the amount of capital a bank or other financial institution has to have as required by its financial regulator. This is usually expressed as a capital ...

for commercial banks was enhanced to RO50 million for local banks and RO10 million for foreign banks. The overall

capital adequacy ratio Capital Adequacy Ratio (CAR) is also known as ''Capital to Risk (Weighted) Assets Ratio'' (CRAR), is the ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss and co ...

of the commercial banks improved to reach 18.5 percent in 2005. The Sultanate has made significant progress in implementing the new capital Adequacy criteria laid down in the Basel-II Accord. The adoption of

Basel II Basel II is the second of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision. It is now extended and partially superseded by Basel III. The Basel II Accord was publ ...

would transform the current approaches and tools of supervision of the CBO as well as the audit and risk management practices of banks. The CBO also administers and participates in the financing of a Bank deposit insurance system, which provides the commercial banks with a high level of security for deposits, while cushioning the effects of any unforeseen circumstances. The CBO also has an early warning system for commercial banks that enables it to predict possible financial crises and take preventive action when necessary. The various

monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often a ...

instruments under the CBO's command could be broadly categorized into indirect measures and direct measures. Indirect policy (market oriented) measures include open market operations involving the buying and selling of securities, issuance of Central Bank's own securities, swaps etc. CD auctions are the main open market type operations conducted by CBO to absorb Omani Rial liquidity and banks can repossess these CDs to acquire liquidity both in the inter-bank market as well as the CBO. Direct monetary policy instruments used by the CBO are mainly in the form of

reserve requirement Reserve requirements are central bank regulations that set the minimum amount that a commercial bank must hold in liquid assets. This minimum amount, commonly referred to as the commercial bank's reserve, is generally determined by the centra ...

s and lending ratios . The CBO has put in place an efficient and advanced payment and settlement system in

Oman Oman ( ; ar, عُمَان ' ), officially the Sultanate of Oman ( ar, سلْطنةُ عُمان ), is an Arabian country located in southwestern Asia. It is situated on the southeastern coast of the Arabian Peninsula, and spans the mouth of ...

. The launch of the Real Time Gross Settlement System (RTGS) was the first milestone and went into live operations on 28 September 2005.

History

Until 1970, when Sultan

Qaboos bin Said Qaboos bin Said Al Said ( ar, قابوس بن سعيد آل سعيد, ; 18 November 1940 – 10 January 2020) was Sultan of Oman from 23 July 1970 until his death in 2020. A fifteenth-generation descendant of the founder of the House of Al Said ...

took over, there was no national authority responsible for the supervision of the incipient banking system. The number of banks was small and the banking activities were limited in scales. The two monetary authorities that preceded the establishment of the Central Bank of Oman, namely the Muscat Currency Authority in 1970 and the Oman Currency Board in 1972, were not vested with full banking status, but, they had well prepared the ground for the emergence of the Central Bank of Oman. However the major event heralding the eminent creation of the Central Bank of Oman was the launching of the Banking Law in 1974 (which was amended vide Royal Decree No. 114/2000).

Chairmen of the board

* Mahmood Muhammad Murad, of Oman Currency Board, 1972–1974 *

Tariq bin Taimur Tariq bin Taimur (30 June 1921 – 28 December 1980) was a member of the Omani royal family who became president of the Council of Ministers (prime minister) of Oman. Tariq was a son of Sultan Taimur bin Feisal, the ruler of the Sultanate of Mu ...

, of Central Bank of Oman, 1974–1976 * Sultans of Oman, 1976–2020 * Taimur bin Asaad bin Tariq al-Saeed, 2020–present

Executive presidents

* Yusuf A. Nimatallah, 1975 – Dec 1978https://www.cbo.gov.om/sites/assets/Documents/English/Circulars/Booklet/CircularBooklet.pdf * Abdul Wahab Khayata, Dec 1978 – June 1991 * Hamood Sangour Al Zadjali, June 1991 – Sept 2017 * Tahir Salim Al Amri, Sept 2017 –

References

{{DEFAULTSORT:Central Bank Of Oman Banks established in 1974 1974 establishments in Oman

Government of Oman Economy of Oman

History

Chairmen of the board

Executive presidents

See also

References