Regions

Oman Development Bank looks into opening of Islamic window

August 22
6:18 AM 2013

The Oman Development Bank (ODB) said it is looking into the possibility of opening an Islamic window to serve small and medium-sized businesses. Islamic banking should be consistent with sharia law. Sharia law prohibits interest payments, unclear contracts and speculation, among others.

ODB's Assistant Manager for Branches Hamed bin Salim Al Harthy said an Islamic window and not conversion to a full-fledged Islamic bank would be a more likely option. He told Reuters in an interview, "The bank will not move toward becoming a full Islamic bank but we have to keep up with the trend in the market, and the trend is for Islamic products."

Its Islamic window, however, would most likely not operate any time soon as ODB is still in the midst of restructuring its business. The rules for Islamic windows state that Islamic banking products could only be offered by the bank in stand-alone outlets. To comply, ODB would have to open new branches or convert some of its fifteen units.

The Central Bank of Oman meanwhile stated last week that they did not plan on granting new permits for Islamic banks or Islamic windows. Reuters, however, reported that OBD is believed to already possess a permission in principle to open an Islamic window.

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