Identifier
Created
Classification
Origin
08MUSCAT515
2008-07-09 09:55:00
CONFIDENTIAL
Embassy Muscat
Cable title:
OMAN CONTINUES TO KEEP ISLAMIC BANKING AT ARM'S
how-toVZCZCXYZ0000 RR RUEHWEB DE RUEHMS #0515 1910955 ZNY CCCCC ZZH R 090955Z JUL 08 FM AMEMBASSY MUSCAT TO RUEHC/SECSTATE WASHDC 9782 INFO RUEATRS/DEPT OF TREASURY WASHDC
C O N F I D E N T I A L MUSCAT 000515
SIPDIS
STATE FOR NEA/ARP, EEB/IFD/OMA
TREASURY FOR OTA VALVO
E.O. 12958: DECL: 07/08/2018
TAGS: EFIN ECON MU
SUBJECT: OMAN CONTINUES TO KEEP ISLAMIC BANKING AT ARM'S
LENGTH
Classified By: CDA Alfred F. Fonteneau, reasons 1.4 b and d
C O N F I D E N T I A L MUSCAT 000515
SIPDIS
STATE FOR NEA/ARP, EEB/IFD/OMA
TREASURY FOR OTA VALVO
E.O. 12958: DECL: 07/08/2018
TAGS: EFIN ECON MU
SUBJECT: OMAN CONTINUES TO KEEP ISLAMIC BANKING AT ARM'S
LENGTH
Classified By: CDA Alfred F. Fonteneau, reasons 1.4 b and d
1. (U) On June 28, Arabic-language daily "al-Shabiba"
retracted a news article that Bank Muscat, the nation's
largest, was preparing to offer the first type of loans in
Oman to be compliant with Islamic Shari'a law. The paper had
mistakenly reported on June 25 that the bank would offer such
loans in efforts to encourage Omanis to keep their savings
inside Oman, rather than opening Shari'a-compliant accounts
in neighboring countries. In the retraction, Bank Muscat
voiced its adherence to Central Bank of Oman (CBO)
regulations.
2. (C) Mansour al-Raisi, Banking Examination Manager for the
CBO, confirmed to Econoff on June 28 that Islamic banking
remained off-limits in Oman. He reiterated the position
taken by CBO Executive President Hamoud bin Sangour
al-Zadjali that institutions are using "Islamic banking" as a
marketing ploy to attract more customers. (Note: Zadjali
most recently stated his opposition to Islamic banking in a
July 3 interview with London-based "al-Sharq al-Awsat,"
though left open the possibility of reconsidering this
decision. End Note.) However, Raisi predicted that, with
rising interest in Oman for Islamic financial products, the
CBO would eventually change course and permit Islamic banking
in the Sultanate.
3. (C) Comment. During the April 2008 Oman Economic Forum,
attendees overwhelmingly cheered when an Omani participant
stated his enthusiasm for Islamic financial products and
asked the CBO Executive President for a timeframe on their
introduction in the Sultanate. When Zadjali replied that
Islamic banking would not be permitted over the near-term,
absolute silence ensued. With rising domestic interest in
Shari'a-compliant products, it appears to be only a matter of
time before the CBO permits commercial banks to offer such
services. End Comment.
FONTENEAU
SIPDIS
STATE FOR NEA/ARP, EEB/IFD/OMA
TREASURY FOR OTA VALVO
E.O. 12958: DECL: 07/08/2018
TAGS: EFIN ECON MU
SUBJECT: OMAN CONTINUES TO KEEP ISLAMIC BANKING AT ARM'S
LENGTH
Classified By: CDA Alfred F. Fonteneau, reasons 1.4 b and d
1. (U) On June 28, Arabic-language daily "al-Shabiba"
retracted a news article that Bank Muscat, the nation's
largest, was preparing to offer the first type of loans in
Oman to be compliant with Islamic Shari'a law. The paper had
mistakenly reported on June 25 that the bank would offer such
loans in efforts to encourage Omanis to keep their savings
inside Oman, rather than opening Shari'a-compliant accounts
in neighboring countries. In the retraction, Bank Muscat
voiced its adherence to Central Bank of Oman (CBO)
regulations.
2. (C) Mansour al-Raisi, Banking Examination Manager for the
CBO, confirmed to Econoff on June 28 that Islamic banking
remained off-limits in Oman. He reiterated the position
taken by CBO Executive President Hamoud bin Sangour
al-Zadjali that institutions are using "Islamic banking" as a
marketing ploy to attract more customers. (Note: Zadjali
most recently stated his opposition to Islamic banking in a
July 3 interview with London-based "al-Sharq al-Awsat,"
though left open the possibility of reconsidering this
decision. End Note.) However, Raisi predicted that, with
rising interest in Oman for Islamic financial products, the
CBO would eventually change course and permit Islamic banking
in the Sultanate.
3. (C) Comment. During the April 2008 Oman Economic Forum,
attendees overwhelmingly cheered when an Omani participant
stated his enthusiasm for Islamic financial products and
asked the CBO Executive President for a timeframe on their
introduction in the Sultanate. When Zadjali replied that
Islamic banking would not be permitted over the near-term,
absolute silence ensued. With rising domestic interest in
Shari'a-compliant products, it appears to be only a matter of
time before the CBO permits commercial banks to offer such
services. End Comment.
FONTENEAU