Financial Crime World

Oman’s Banking Sector: Strengthening AML/CFT Measures and Depositor Protection

In an effort to further fortify its banking sector, Oman has implemented robust measures to combat money laundering and terrorist financing (AML/CFT) while ensuring depositor protection.

Cornerstone Legislation

The cornerstone legislation governing AML/CFT in Oman is the Anti-Money Laundering and Combating Terrorism Financing Law (Royal Decree 30/2016), which applies to:

  • Banks
  • Financial institutions
  • Non-financial businesses and professions
  • Non-profit associations

Under this law, banks are required to: + Retain records of client identities, transactions, and activities for a period of ten years. + Conduct thorough due diligence on clients, including identifying Politically Exposed Persons (PEPs) and carrying out further checks on them. + Prohibit opening anonymous accounts or providing services to such accounts.

Depositor Protection

To ensure depositor protection, Oman has established the Bank Deposit Insurance Scheme (BDIS), which provides comprehensive insurance cover on specified deposits with licensed banks operating in the country. The scheme is funded by:

  • Initial contributions from the Central Bank of Oman and member banks
  • Annual premiums collected from member banks

The BDIS aims to: + Maintain confidence in the banking system + Promote financial stability + Provide risk coverage for depositors

The scheme has been successful in achieving its objectives, with a significant increase in deposits since its inception.

Key Takeaways

  • Oman’s AML/CFT law requires banks to retain records of client identities, transactions, and activities for a period of ten years.
  • Banks must conduct thorough due diligence on clients, including identifying PEPs and carrying out further checks on them.
  • Banks are prohibited from opening anonymous accounts or providing services to such accounts.
  • The BDIS provides comprehensive insurance cover on specified deposits with licensed banks operating in Oman.
  • The scheme is funded by initial contributions from the Central Bank of Oman and member banks, as well as annual premiums collected from member banks.

By strengthening its AML/CFT measures and depositor protection regime, Oman has taken a significant step towards maintaining financial stability and promoting confidence in its banking sector.