As Oman prepares to introduce Islamic finance, a restriction on the money market instruments which banks can use may curb their ability to manage funds in the market, hurting profitability.
Authorities are expected to release Islamic banking rules by year-end, making Oman the last country in the six-nation Gulf Cooperation Council to accommodate sharia-compliant banks.
But the draft rules, seen by bankers before their publication, exclude an instrument which is widely used in some
other countries: commodity murabaha or tawarruq, several banking sources in Oman told Reuters. They declined to be named because of the sensitivity of the issue.
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