Financial Crime World

Oman’s Central Bank Unveils Financial Consumer Protection Regulatory Framework for Licensed Entities

The Central Bank of Oman (CBO) has introduced a comprehensive financial consumer protection regulatory framework (FCPRF) for licensed banks and finance and leasing companies, effective December 2021. The FCPRF aims to ensure that these entities adhere to international best practices in financial consumer protection.

Key Principles

The framework is built around five key principles:

  • Disclosure and Transparency: Licensed entities must provide clear and concise information about their products and services to consumers.
    • Producing a “Key Fact Statement” and periodic written statements of accounts, summarizing the key characteristics of financial products.
  • Fair Treatment and Business Conduct: Licensed entities must treat customers fairly and avoid unfair practices such as conflicts of interest, responsible lending, and professional competence.
  • Data Protection and Privacy: Licensed entities must ensure the protection and privacy of customer data, notify the CBO of significant breaches without undue delay, and establish an internal unit responsible for data protection and privacy.
  • Dispute Resolution Mechanisms: The framework emphasizes the importance of timely resolution of complaints and provision of redress by licensed entities. Consumers should have access to internal complaint handling mechanisms and know their rights in asserting those claims.
  • Financial Education and Financial Capability: Licensed entities must undertake consumer awareness and financial education activities, including developing specific financial capability programs and reporting annual plans to the CBO.

Compliance

Compliance with the FCPRF is the responsibility of the board of directors of licensed entities. They are required to conduct an impact analysis and submit a plan of action to ensure compliance within six months. Licensed entities must also disclose their status of financial consumer protection in their annual reports from 2023 onwards.

The CBO will take necessary regulatory actions where standards are not met, including penalties for violations. The bank has promised to provide further details on the application and implementation of the FCPRF in due course.

Assistance

Local law firm Al Tamimi & Company’s Banking & Finance team is available to assist clients with navigating compliance requirements under the FCPRF.