Central Bank of Oman (CBO)

Overview

Oman's supreme financial institution and central bank, responsible for monetary policy, financial regulation, and supervision of the banking and payment sectors.

The Central Bank of Oman (CBO) is the supreme financial institution in the Sultanate of Oman, responsible for setting and implementing monetary and financial policies to ensure economic and financial stability. Established in December 1974 and beginning operations on April 1, 1975, the CBO replaced the Oman Currency Board as the principal currency authority.

The bank underwent significant structural reforms in January 2025. Royal Decree 2/2025 promulgated a new Banking Law, while Royal Decree 3/2025 reorganized the bank's governance structure, granting it legal personality and financial and administrative independence. The position of Executive President was abolished and replaced with that of Governor.

Key Facts:

• Established: December 1974 (operations began April 1, 1975)

• Headquarters: P.O. Box 1161, PC 112 Ruwi, CBD Area Ruwi, Muscat, Oman

• Current Governor: Ahmed Al Musalmi (appointed January 2025)

• Phone: +968 24 777 777

• Email: [email protected]

• Website: https://cbo.gov.om/

• Business Hours: Sunday to Thursday 8:00 AM to 3:00 PM

Basic Identity

Classification

Inclusion Justification

What This Entity Oversees

Licensing and Authorization

The CBO issues and manages licenses for:

• Commercial banks

• Investment banks (new category under 2025 law)

• Digital banks (new category under 2025 law)

• Finance and leasing companies

• Non-banking financial institutions

Regulatory Scope Expansion (2025)

The new Banking Law expanded CBO regulatory authority to include digital banks and investment banks as distinct regulatory categories, broadening the institution's supervisory reach beyond traditional commercial banking.

Supervisory Powers

The CBO maintains comprehensive supervisory authority including:

• Continuous monitoring of financial soundness and compliance

• On-site and off-site examinations

• Authority to require additional reserves or paid-up capital

• Restrictions on operational activities for non-compliant institutions

• Requires verification from official sources Stress testing and capital adequacy assessments

Financial Consumer Protection Regulatory Framework (FCPRF)

Issued in December 2021, the FCPRF applies to all licensed banks, finance, and leasing companies. It establishes five core principles:

1. Fair Dealing — Banks must treat customers fairly and transparently

2. Disclosure and Transparency — Clear communication of terms, fees, and risks

3. Complaints Handling — Accessible and timely dispute resolution mechanisms

4. Consumer Data Protection — Safeguarding of customer information and privacy

5. Responsible Lending — Sound lending practices aligned with customer capacity

Enforcement Against Consumer Violations

The CBO enforces FCPRF compliance through:

• Regular compliance monitoring and examinations

• Penalty and enforcement measures for violations

• Requires verification from official sources Public disclosure of serious consumer protection breaches

• Mandatory remediation and customer compensation orders

Complaint Resolution

Licensed entities must maintain internal complaint handling mechanisms. Requires verification from official sources The CBO provides appeal mechanisms for consumers dissatisfied with bank responses.

Regulatory Powers

The CBO possesses extensive enforcement authority under the Banking Law and related regulations:

Preventive Action Powers

When an institution is deemed unsound, unsafe, or in violation of banking law, the CBO may:

• Impose restrictions on banking operations

• Require increases to reserves or paid-up capital

• Prohibit distribution of profits to shareholders

• Impose conditions on continued operations

Penalty Authority

The CBO may impose penalties and enforcement measures for violations of:

• The Banking Law and its regulations

• Financial Consumer Protection Regulatory Framework

• Payment Systems requirements

• Any CBO circulars or directives

License Suspension and Revocation

The CBO possesses authority to:

• Suspend business licenses for non-compliance

• Revoke licenses of entities in material violation of applicable law

• Implement orderly wind-down procedures for failed institutions

Regulatory Role and Function

Legal Foundation

Primary Statute

Banking Law (Royal Decree 2/2025) — The foundational legislation establishing the CBO's regulatory framework and authority. This law fully repeals and replaces the previous Banking Law (Royal Decree 114/2000) and modernizes the legal framework to align with contemporary banking, digital finance, and technological advancements.

The new Banking Law aims to:

• Enhance financial stability and develop banking institutions

• Expand CBO regulatory oversight

• Align with international standards and best banking practices

• Incorporate digital banks and investment banks within the regulatory scope

• Strengthen consumer protection measures

Secondary Legal Framework

Royal Decree 3/2025 — Reorganizes CBO governance structure, granting the institution legal personality and financial and administrative independence.

National Payment Systems Law (Royal Decree 8/2018) — Establishes the framework for payment system development, with the objective of creating secure, effective, and efficient payment infrastructure.

Financial Consumer Protection Regulatory Framework (2021) — Establishes five core principles for consumer protection across all licensed entities.

Binding Authority

The CBO possesses binding regulatory authority over all licensed banking institutions, finance and leasing companies, non-banking payment service providers, and other financial entities operating under its supervision. The CBO's regulations, circulars, and directives are mandatory for all regulated entities.

Licensing and Authorization Relevance

Cryptocurrency and Digital Assets

The CBO does not recognize cryptocurrencies as legal tender, as stated in a cautionary notice issued in 2020. The bank has not issued any licenses or authorizations to cryptocurrency service providers operating independently.

Virtual Asset Service Providers (VASPs)

While the CBO does not regulate VASPs directly, the Financial Services Authority (FSA) issued Decision No. (E/35/2023), which requires:

• Registration of Virtual Asset Service Providers (VASPs) with the FSA

• Implementation of Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) requirements

• Enhanced due diligence and compliance obligations

Fintech Regulatory Sandbox

The CBO launched the Fintech Regulatory Sandbox (FRS) on December 10, 2020, enabling:

• Testing of innovative financial technology solutions

• Controlled experimentation with new business models and services

• Collaboration between fintech companies and licensed financial institutions

• Evaluation of emerging technologies for broader adoption

Digital Banking

Under the 2025 Banking Law reforms, digital banks are now recognized as a distinct category of licensed institution, subject to comparable regulatory standards as traditional commercial banks while accommodating digital-first operating models.

Payments and Money Movement Relevance

National Payment Systems Framework

The CBO oversees the implementation of the National Payment Systems Law and its Executive Regulations. This framework:

• Establishes standards for secure, effective, and efficient payment systems

• Licenses non-banking institutions to provide electronic payment services

• Supports fintech innovation within a regulated environment

Operating Rules: The CBO maintains Payment Systems Operating Rules available on its official regulatory framework page.

Digital Payments and Mobile Banking

The CBO has fostered rapid digital payment adoption in Oman:

• Mobile payment transactions increased 551% from 2021 to 2022

• The CBO supports the development of cashless society initiatives aligned with Vision 2040

• Electronic payment services are expanding through licensed non-banking providers

Open Banking

As of January 2025, the CBO approved a regulatory framework for open banking following a Board of Governors decision on December 29, 2024. This framework enables:

• Standardized API connectivity between financial institutions

• Secure third-party access to customer financial data (with consent)

• Enhanced innovation in financial services delivery

Payment Systems Governed or Overseen

The CBO operates and/or oversees the national payment and settlement infrastructure of Oman. A new modern real-time gross settlement system was launched to enhance payment services.

National RTGS System (24/7 Real-Time Gross Settlement)

Type: Modern Real-Time Gross Settlement (RTGS) system

Operational Status: Launched and operational on 24/7 basis

Key Characteristics:

• 24/7 operation enabling convenient money transfers

• Available on weekends and holidays

• Supports government entities, private institutions, and individuals

• Real-time settlement finality

• Modern infrastructure aligned with international standards

Regulatory Framework: Operates under the National Payment Systems Law (Royal Decree 8/2018) and its Executive Regulations

International Standards Compliance:

• Adherence to ISO 20022 standard for financial transaction messages

• Promotes interoperability with payment and ancillary systems

• Facilitates digitization and integration of payment processes

Regional Payment System Integration

GCC Integration: The Omani RTGS system integrates with:

• AFAQ: GCC regional payment system connecting Gulf Cooperation Council countries

Arab Regional Integration:

• BUNA: Arab Regional Cross-Border Payment System

• Includes the Omani Rial as a settlement currency

• Multiregional settlement capability

Digital Banking Framework

The CBO approved the Regulatory Framework for Licensing and Supervising Digital Banks effective June 1, 2025.

Key Features:

• First regulatory framework specifically for digital banks

• Digital banks defined as institutions operating exclusively through digital platforms

• CBO responsible for issuing comprehensive regulations covering:

• Licensing and authorization processes

• Capital requirements appropriate for digital operations

• Cybersecurity and data protection standards

• Consumer protection frameworks

• Alignment with Oman Vision 2040 objectives

Market Status: Framework encourages development of purely digital banking institutions in Oman

Digital Currency and Open Banking Development

The CBO is engaged in ongoing work on:

• Digital Currency: Central Bank Digital Currency (CBDC) research and development

• Open Banking APIs: Framework development for third-party financial service integration

• Modern financial infrastructure modernization

Source: Central Bank of Oman - Regulatory Framework for Digital Banks, Central Bank of Oman RTGS Launch

Relationship to Other Regulators

Multilateral Standards Compliance

The CBO aligns regulatory frameworks with:

• Basel Committee on Banking Supervision (BCBS) standards for capital adequacy and banking supervision

• Financial Action Task Force (FATF) recommendations on AML/CTF compliance

• Bank for International Settlements (BIS) guidance on payment systems and financial stability

Cross-Border Collaboration

The CBO participates in:

• Gulf Cooperation Council (GCC) regulatory coordination mechanisms

• Bilateral agreements with other central banks for monetary cooperation

• Requires verification from official sources Regional working groups on fintech and digital currency developments

Central Bank Network Membership

The CBO maintains membership in international central banking organizations and participates in information-sharing arrangements on regulatory best practices, payment system development, and financial stability.

Geography and Jurisdiction Notes

Important Departments and Divisions

Key Public Resources

Primary Contact Information

Central Bank of Oman

• Address: P.O. Box 1161, PC 112 Ruwi, CBD Area Ruwi, Muscat, Oman

• Phone: +968 24 777 777

• Email: [email protected]

• Website: https://cbo.gov.om/

• Contact Page: https://cbo.gov.om/Pages/Contact-Us.aspx

Leadership

• Governor: Ahmed Al Musalmi (appointed January 2025)

• Replaced Tahir Al Amri (served 2017-2025)

• Previously: CEO of Sohar International Bank and National Bank of Oman

• Board Chairman: Taimur bin Asa'ad Al Said

• Vice Chairman: H.E. Dr. Said Al Saqri (also Minister of Economy)

• Executive Vice President: Requires verification from official sources Abdulaziz Al-Manthari

Official Resources

• Banking Law and Regulations: https://cbo.gov.om/Pages/BankingLaw.aspx

• Regulatory Framework: https://cbo.gov.om/Pages/RegulatoryFramework.aspx

• Payment Systems Rules: https://cbo.gov.om/Pages/Payment-Systems-Operating-Rules.aspx

• Financial Consumer Protection: https://cbo.gov.om/sites/assets/Documents/Global/Circulars/2021/BM%201184%20dt.%2029.12.2021%20-%20FCPRF.pdf

Related Government Entities

• Financial Services Authority (FSA) — Regulates capital markets, insurance, and virtual asset service providers

• Ministry of Economy — Broader economic policy oversight

• Oman's Government Portal: https://gov.om/en/central-bank-of-oman

Notes on Naming and Language