The Central Bank of Oman (CBO) has approved a new Shariah-compliant regulatory framework for finance and financial leasing companies, a strategic move aimed at reinforcing the country’s expanding Islamic banking sector and attracting further investment.
The approval was granted during the CBO’s sixth board meeting of 2025, held on 29 December at its headquarters in Muscat.
A Catalyst for Growth
This move comes as Oman’s Islamic finance sector gains significant momentum. In September, Fitch Ratings forecast that the industry would surpass US$40 billion between the second half of 2025 and 2026, a projection driven by regulatory reforms and rising demand for Shariah-compliant financial products.
Fitch highlighted the newly approved framework as a key driver for this growth, noting that clearer regulations and stronger oversight will strengthen investor confidence and attract new capital into the Sultanate.
“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.
Regional Context
Oman’s efforts mirror a robust growth trend across the broader Gulf region. In the neighbouring UAE, Islamic finance assets exceeded US$285 billion by the end of the first quarter of 2025, fuelled by strong demand and an expanding sukuk market. This regional boom underscores the increasing appetite for Shariah-compliant financial products.
Oman’s Islamic Finance Journey
The CBO first laid the groundwork for Islamic banking in May 2011 with preliminary licensing guidelines, which were formalized by a royal decree in December 2012. The decree mandated the creation of Shariah supervisory boards and authorized the CBO to establish a central High Shariah Supervisory Authority.
While Oman remains the smallest Islamic finance market in the Gulf Cooperation Council, it continues to post double-digit growth in both Islamic banking assets and sukuk issuance. As of August 2025, Fitch estimated the sector’s size at US$36 billion.
About Central Bank of Oman
The Central Bank of Oman is the primary regulatory body for the Sultanate’s banking and financial sector. Established in 1974, it is responsible for maintaining the stability of the national currency, managing the country’s monetary policy, and supervising all licensed banks and financial institutions operating within Oman to ensure a sound and efficient financial system.
Source: Fintech News Middle East
