Muscat: Oman has bolstered its financial landscape with a Royal Decree introducing the Law on Protection of Bank Deposits, designed to shield depositors and maintain the sector’s resilience.
The Central Bank of Oman (CBO) emphasizes that the law provides a crucial safety net for depositors in the event of any bank or licensed financial institution’s failure. Central to this regulation is safeguarding “small depositors,” offering swift compensation to those most vulnerable and fostering trust in the stability of the banking sector.
This new framework incentivizes savings and strengthens public confidence, ensuring banks remain financially sound and systemic risks are minimized. It sets a clear path for managing crises by establishing two independent funds:
- Takaful Fund for deposits with Islamic financial institutions.
- Insurance Fund for deposits with conventional banks.
Eligible depositors whose accounts exceed OMR 20,000 are capped at receiving OMR 20,000 in compensation. However, deposits at or below that threshold are fully covered. Additionally, if multiple accounts are held with the same defaulting institution, their balances will be consolidated under the compensation scheme. Depositors with accounts across different banks can access up to OMR 20,000 from each institution, providing added reassurance.
With its 31 articles, the new law underscores Oman’s commitment to financial stability, creating a robust buffer to safeguard public funds and enhance trust in the country’s financial system.
