He said the Year 2012 was yet another successful year for the banking sector of Oman with satisfactory growth in assets, deposits and advances. Profitability of the banks increased significantly compared to 2011.He added that banks at the end of 2012 remained well capitalised in the backdrop of continued global financial crisis. He requested the bankers not to be complacent about the risks undertaken by their banks and they should constantly readjust the balance sheets, strengthen risk management systems and gear up liquidity management and contingency planning to meet unforeseen developments and pay attention to credit facilities and bank loans.
Al Zadjali pointed out that last year also witnessed the launch of Islamic Banking operations in the Sultanate and it is expected that the banking penetration in the Sultanate is set to increase with opening of new branches of the conventional as well as Islamic banking operations in throughout the country. He also said that SMEs needed to be supported and urged the banking community to gear up their infrastructure and tweak their policies to accelerate credit flow to SME sector support Omani job-seekers in line with the Government policy in this regard, as growth of SMEs, also serving national objectives.
He said the Central Bank has issued a roadmap for implementation of Basel III norms in the Sultanate. The stronger definition of capital, higher minimum core capital requirements, new capital buffers, leverage ratio and liquidity measures will help strengthen the capital and liquidity positions of banks significantly. This will contribute to financial stability by enhancing the ability of banks to withstand periods of economic and financial stress. He said that liberalisation and globalisation offer cross-border business opportunities to banks. Cross-border business opportunities in the form of banks lending to non-residents entities and placement of bank funds abroad do expose the banks to country risk, transfer risk, credit/counterparty risk and funding risk.He said the CBO is formulating prudential regulations and risk limits to mitigate the underlying risk profile of banking institutions, which would alley exposure of the branches of local banks overseas to potential risks. He urged officials of licenced banks to limit credit facilities to non-resident entities and to consider the exposure limits provided for in the Banking Law and the CBO relevant regulations in order to protect their assets and funds on the one hand, and avoid causing any risks to the banking sector on the other.Al Zadjali also urged officials of licenced banks to open banking accounts for all employees of the institutions and companies of the private sector to enable them to receive their salaries on time.
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