Oman’s planned debut sukuk denied authorisation by the Central Bank

Bank Muscat’s USD1.3 b (denominated in OR, 500m) sakk – which would have been the debut in Oman was rejected by the Central Bank of Oman (according to reporting 15 July Fatma al-Arimi, Reuters). The issue was to take place as a programme over five years, and unusual in being planned as a tranched sakk. Reasons were not given for the rejection other than the statement that the CBO regulators were concerned about the presence of personal lending in the sukuk portfolio. If anything this degree of rigor concerning the treatment of sakk as a form of consumer credit supports the stated intentions of the CBO and the Islamic Banking Regulatory Framework of 2013 to uphold high standards both in terms of capital and prudential regulation but also along lines of Islamic legal compliance.

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