DUBAI: The government of Oman has approved the establishment of an Islamic bank, a circular said, which would be the Gulf Arab state's first lender to specifically offer Sharia-compliant products and services.
It was not immediately understood whether conventional banks already operating in the country would be allowed to open Islamic banking windows.
"His Majesty approved the establishment of an Islamic Bank and allowing the banks in the Sultanate to open new branches if they wish so," the circular posted on Oman news agency said.
Oman is the only state among the six Gulf Cooperation Council (GCC) members which has not so far set up a bank specifically offering products and services complying with Islamic law.
The Gulf state's decision will resonate with Islamic lenders across the region which have struggled to attract clients amid stiff competition from conventional counterparts offering Islamic banking windows.
In February, Qatar moved to ban conventional banks offering Islamic finance services in a bid to boost its Islamic lenders.
In a report last November, PricewaterhouseCoopers said the $1 trillion Islamic finance industry was expected to grow by between 15 to 20 percent per year going forward.
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