Muscat: The Central Bank of Oman (CBO) has noted that the issuance of Royal Decree No. 47 of 2024 promulgating the Bank Deposit Protection Law contributes to maintaining a healthy and strong financial sector.
This law is based on protecting deposits in the event of the failure of any of the banks or financial institutions authorized by the Central Bank of Oman to receive deposits. This law is considered an integral part of the financial security network in the Sultanate of Oman.
This law aims to protect the interests of the most vulnerable “retail depositors” in the event of a bank failure by establishing a prompt and effective compensation system and increasing confidence in the banking system.
The main objectives of protecting bank deposits are: Provide comprehensive protection cover for members’ deposits to encourage savings. To increase confidence in the financial soundness of the banking sector in the Sultanate of Oman and to minimize the impact of systemic risks in the banking sector.
This law consists of section (31). Its main provision is the establishment of two separate funds: the Takaful Fund for the protection of deposits of licensed Islamic institutions and the Insurance Fund for the protection of deposits of licensed conventional institutions.
The law also sets a current cap of compensation at OMR20,000 for eligible deposits with a value exceeding OMR20,000. On the other hand, deposits below OMR20,000 are fully covered.
Additionally, the Act provides that if a depositor has multiple accounts with the same default bank, the amount deposited in all accounts eligible for compensation by the system shall be collected to calculate the compensation amount. I am. All deposits covered by the system for the same depositor in multiple banks are processed separately, so the depositor is entitled to receive up to OMR20,000 from each bank.
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