(MENAFN) Oman’s Islamic finance industry is set to surpass USD40 billion in the medium term and is projected to reach USD30.9 billion by the end of September 2024. Based on Fitch Ratings, Islamic banking holdings will make up just over two-thirds of this total, followed by outstanding sukuk at 30 percent and takaful contributions at 1 percent.

Rising public demand, strengthening distribution networks, use of sukuk as a public financing tool by the sovereign and corporates, as well as regulatory steps might lead to additional development in the Omani Islamic finance field, states Fitch Ratings.

The Central Bank of Oman (CBO) solved a structural gap in October 2024 with the launch of the Bank Deposit Protection Law, which might guard Islamic banks’ deposits. “We expect this will aid confidence in Oman’s Islamic banking sector as the previous deposits insurance scheme only covered conventional banks’ deposits,” notes Fitch.

Omani Islamic banks’ overall holdings (including windows) hit OMR8.2 billion (USD21.3 billion) at the close of the third quarter of 2024, with Islamic banking developing to a market share of 18.7 percent of Omani’s banking field holdings (at the close of the third quarter of 2023) 17.6 percent.

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