Central Bank of Oman is the central bank of Oman.

History
The establishment of the Central Bank of Oman in the beginning of 1974 was a natural outcome of the steady evolution of the monetary system in the Sultanate of Oman coupled with the prospects of the vast economic developments the country was about to witness. Until 1970, when H.M.Sultan Qaboos bin Said took over, there was no national authority responsible for the supervision of the incipient banking system. The number of banks was small and the banking activities were limited in scales.

The two monetary authorities that preceded the establishment of the Central Bank of Oman, namely the Muscat Currency Authority in 1970 and the Oman Currency Board in 1972, were not vested with full banking status, but, they had well prepared the ground for the emergence of the Central Bank of Oman.

However the major event heralding the eminent creation of the Central Bank of Oman was the launching of the Banking Law in 1974 (which was amended vide Royal Decree No. 114/2000).

Functions:

• The Central Bank of Oman acts as the depository agency for the Government of the Sultanate of Oman;
• It’s also the regulator of the Oman’s commercial banks, specialized banks and finance and leasing companies. Money exchange houses also are regulated by the Central Bank of Oman;
• It makes advance payments to the Government in respect to temporary deficiencies in recurrent revenues;
• It manages loans on behalf of the Government;
• It maintains, at all times, a part of the Sultanate's foreign assets as cover for the currency in circulation at prescribed ratios;
• It accepts deposits from banks operating in the Sultanate and from other foreign Central Banks, International Monetary and Financial Institutions. There are two types of deposits that the Central Bank of Oman accepts from commercial banks: deposits which are required by the Banking Law or sanctioned by the Board of Governors and voluntary deposits which are deposited by banks' own will with a view to gain the benefits attached to such deposits;
• It advances credit to local banks and engages in investment activities through the purchase and sale of financial instruments;
• It determines discount and re discount rates;
• It provides clearing house services for all member banks;
• It issues the national currency, supervises its circulation, preserves its value and manages foreign assets;
• In addition to the above mentioned traditional functions, the Central Bank of Oman also acts as the adviser of the Government in economic matters in general and monetary and financial matters in particular.

Structure and Organization
The general superintendence and direction of the Central Bank's affairs is vested in the Board of Governors. The Board has full authority to perform all acts required for the management and operations of the Central Bank and supervision of the banking business in the Sultanate.

The Board of Governors consists of seven members appointed by H.M. the Sultan. The Board is vested with a wide range of powers including the issuance of regulations pertinent to the proper implementation of the Banking Law, regulations regarding levels and rates of discount and re discount of commercial papers, regulations regarding capital adequacy, appointment of Bank personnel and description of jobs and other regulations deemed necessary.

The first chairman of the Board of Governors was the late His Highness Tariq bin Taimoor Al Said (1974 – 1980).

Payment and Settlement Systems
A Payment and Settlement System refers to set of instruments and tools for making payments among the system participants, processes, rules and communication network for transmission of payment instructions between the payer and payee and organizational and institutional arrangement governing such payments.

The Central Bank of Oman recognizes the importance of well-organized payment and settlement systems for the following reasons:

• They complement a financial system in its effective functioning due to their ability to ensure efficient and cost effective discharge of claims and liabilities arising out of economic transactions, and hence are partners in economic growth;
• They help in reducing the credit/counter party risk in the financial system;
• They provide a platform for monetary policy operations for effective and efficient transmission of monetary impulses;
• They provide important statistical inputs useful for insight into the economic activity for the financial system supervisors and analysts;
• They possess a huge systemic value and hence their orderly functioning is of critical significance for financial and economic stability.

The Central Bank of Oman is responsible for maintaining the internal and external value of the national currency. It is also the single integrated regulator of Oman's financial services industry.

It is committed to excellence in providing monetary and financial stability and fostering sound and progressive financial sector to achieve sustained economic growth for the benefit of the nation.

Useful links

Currency of Oman:

Omani rial

List of Central Banks:

Central Banks

Official website of Central Bank of Oman:

www.cbo-oman.org

Ministry of Finance of Oman:

www.mof.gov.om

Exchange Rates:

www.cbo-oman.org