Financial Crime World

Oman’s Financial Sector Regulator Announces New Guidelines for Banks

Muscat, Oman - The Central Bank of Oman (CBO) has introduced new guidelines for licensed banks in the country, aimed at ensuring their stability and resilience in an increasingly complex global financial environment.

Key Highlights

  • Foreign exchange exposure is limited to 40% of Tier 1 capital.
  • Real estate exposure by loan or security value shall not exceed 60% of the bank’s net worth.
  • Borrowings from banks abroad are restricted to 300% of net worth, with sub-limits for time buckets.

Investment Powers and Underwriting Obligations

  • Overseas investments are limited to 25% of the ceiling limitation.
  • Underwriting obligations are restricted to 20% of the bank’s net worth.

Credit Limitations

  • Housing loans are capped at 15% of total credit.
  • Other personal loans shall not exceed 35% of total credit.
  • Maximum tenors for non-housing personal loans and non-housing loans have been set at 10 years and 25 years, respectively.
  • Debt Service Ratio cannot exceed 50% and 60%.

Customer Due Diligence and AML/CFT

  • The CBO has emphasized the importance of customer due diligence requirements.
  • The country is committed to international initiatives in combating money laundering and financing of terrorism.
  • Oman is updating itself in legal, institutional, and procedural requirements over the period.

Anti-Money Laundering and Combating Financing of Terrorism Unit

  • The CBO has established an Anti-Money Laundering and Combating Financing of Terrorism Unit, functioning in the Banking Development Department.
  • Licensed institutions are monitored and supervised through periodical reports and on-site examinations.

Quote

“The new guidelines aim to ensure the stability and resilience of our banking sector, while also promoting international best practices in combating money laundering and financing of terrorism.” - A senior official at the CBO

Effective Date and Compliance

  • The new guidelines take effect from [insert date].
  • Banks are required to comply with them by [insert date].
  • The CBO will conduct regular monitoring and supervision to ensure compliance with the new guidelines.