Oman launches first Sharia-compliant electronic liquidity management system

Dubai: The Central Bank of Oman (CBO) has launched an electronic system providing Sharia-compliant liquidity management tools for licensed Islamic banks in the Sultanate, state-run news agency ONA said on Tuesday.

The platform, reviewed and approved by the CBO’s Supreme Sharia Supervisory Authority, aligns with regulatory requirements and Islamic Sharia principles.

In its first phase, the system introduces two instruments: the Qard Hasan (benevolent loan) and restricted Mudaraba instruments, aimed at injecting Omani rial liquidity into the banking sector. Under the framework, the central bank provides liquidity against Sharia-compliant securities, while Islamic banks invest the funds in Sharia-compliant instruments.

The platform also facilitates issuance of government securities, including Islamic treasury bills and sukuk, as well as tools to absorb excess liquidity in later stages.

CBO officials highlighted that the system is the first of its kind in the Middle East and North Africa, offering diverse liquidity tools to support monetary and fiscal policy in compliance with Sharia law. It is integrated with Oman’s national financial market infrastructure, linked to the real-time gross settlement and clearing systems operated by Muscat Clearing and Depository Company.

The launch follows CBO’s earlier initiative in December 2022 to introduce a Sharia-compliant US dollar investment instrument for Islamic banks, marking a continued commitment to Islamic financial innovation.