Financial Crime World

Oman’s Central Bank Issues New Financial Consumer Protection Regulatory Framework for Licensed Banks and Finance Companies

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The Central Bank of Oman (CBO) has issued a new regulatory framework aimed at enhancing financial consumer protection in the country. The Financial Consumer Protection Regulatory Framework (FCPRF), which came into effect in December 2021, sets out five key principles that licensed banks and finance companies must adhere to when dealing with individual consumers and small and medium-sized enterprises.

The FCPRF’s Five Principles

Under the new framework, licensed entities are required to adhere to five key principles aimed at promoting fair treatment, transparency, and accountability. These principles include:

  • Disclosure and Transparency: Licensed entities must provide clear and concise information about their products and services, including risks and conflicts of interest. They are also required to produce regular statements of accounts that summarize key product characteristics.
  • Fair Treatment and Business Conduct: The framework requires licensed entities to treat consumers fairly and avoid unfair practices. This includes ensuring that staff and agents are properly compensated and that customers are protected from fraudulent activities.
  • Data Protection and Privacy: Licensed entities must collect, use, and store customer data in a secure and confidential manner. They are also required to notify the CBO of any significant breaches and establish a separate unit responsible for data protection and privacy.
  • Dispute Resolution Mechanisms: The framework requires licensed entities to have internal complaints handling mechanisms in place to ensure that consumer complaints are addressed and resolved in a timely manner.
  • Financial Education and Financial Capability: Licensed entities must undertake financial education and awareness activities, including developing specific programs to promote financial capability among consumers.

Compliance Requirements

The responsibility for ensuring compliance with the FCPRF lies with the board of directors of licensed entities. Local licensed entities are encouraged to establish separate committees to oversee implementation, while all licensed entities must include the framework in their existing committee terms of reference.

Licensed entities will be required to disclose their financial consumer protection status in their annual reports from 2023 onwards.

Actions Required by Licensed Entities

The FCPRF requires licensed entities to:

  • Conduct an impact analysis and submit a plan of action to ensure compliance with the framework within six months.
  • Disclose their financial consumer protection status in their annual reports from 2023 onwards.
  • Establish internal mechanisms for reporting and addressing non-compliance issues.

How We Can Help

Al Tamimi & Company’s Banking & Finance team is well-equipped to assist clients in navigating the FCPRF requirements. For any queries or concerns related to the new framework, please do not hesitate to contact our experts below:

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