The Central Bank of Oman (CBO) has approved a new Shariah-compliant regulatory framework for finance and financial leasing companies, reinforcing the country’s efforts to expand Islamic banking and attract investment.
According to Arab News, the approval was granted during the CBO’s sixth board meeting of 2025, held on 29 December at its headquarters in Muscat’s Commercial District.
The move comes as Oman’s Islamic finance sector gains momentum.
In September, Fitch Ratings forecast that the industry would surpass US$40 billion between the second half of 2025 and 2026.
The projection reflects regulatory reforms and rising demand for Shariah-compliant financial products.
Fitch highlighted the newly approved framework as a key driver. It said clearer regulations and stronger oversight will strengthen investor confidence and attract new capital.
The broader Gulf region is also seeing robust growth in Islamic finance.
In the UAE, industry assets exceeded US$285 billion by the end of the first quarter of 2025, fuelled by strong demand and an expanding sukuk market, Fitch said.
“During the meeting, the board approved the regulatory framework for finance and financial leasing companies that are compliant with the provisions of Islamic Sharia,”
the CBO said in its statement.
The board also approved the CBO’s 2026 annual budget, along with those of the Banking Deposits Protection Scheme and the Oman Credit and Financial Information Center (Mala’a).
The board reviewed several agenda items and reports and took corresponding decisions.
Oman’s banking system includes both conventional and Islamic institutions.
Islamic banking services are provided through standalone banks as well as Islamic windows within conventional local and foreign banks licensed in the country.
The CBO laid the foundations for Islamic banking in May 2011 by issuing preliminary licensing guidelines.
A royal decree formalised these measures in December 2012. It mandated Shariah supervisory boards and authorised the CBO to establish a central High Shariah Supervisory Authority.
Oman remains the smallest Islamic finance market in the Gulf Cooperation Council.
Despite this, it continues to record double-digit growth in Islamic banking assets and sukuk issuance.
Fitch estimated the sector’s size at US$36 billion as of August 2025. Islamic banking assets accounted for nearly two-thirds of the total.
Featured image credit: CBO
