Muscat: Bank Nizwa, Oman’s first Islamic bank and Al Hilal Islamic Banking Services from ahlibank have entered into a Wakala agreement, which will facilitate interbank placements between the two banks. The agreement is an important first step by the two banks to develop Oman into one of the frontrunners in the international Islamic banking space.

Officials of Bank Nizwa and Al Hilal Islamic Banking Services signing the Wakala agreement. Photo provided

Al Hilal Islamic Banking Services becomes the first Islamic bank to enter into such an agreement with Bank Nizwa. The Wakala agreement signed by the two banks is Sharia-compliant and follows the widely accepted Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) standards making it easier for Omani banks to also engage with international Islamic banks for their interbank liquidity management.

The two banks emphasised their commitment to develop the local Islamic interbank market through mutual cooperation and thus set a precedent for other Islamic banks to sign similar agreements and to eventually develop a seamless Islamic banking infrastructure in the Sultanate.

Value for customers

Speaking at the signing ceremony, Dr Jamil Jaroudi, chief executive of Bank Nizwa said: “As the first Islamic bank in Oman, we are committed to create value for our customers and all the Bank Nizwa stakeholders, through continuous innovation. It is of prime importance to create an environment that allows Islamic banking to grow organically in compliance with Sharia laws. It is our responsibility to develop the Islamic banking industry as a whole and we are pleased to join hands with Al Hilal Islamic Banking Services to accomplish this objective.”

Abdullah Salim Al Jabry, deputy GM and head of Al Hilal Islamic Banking Services, stated that this agreement epitomises the commitment and focus of the Islamic finance institutions to move in the right direction towards building a foundation for the growth of Islamic finance in the Sultanate.

One of the key indicators of growth is more interaction between the entities in the industry and a closer understanding of the market requirements. “We are proud to say that Al Hilal Islamic Banking services offer the largest Islamic banking network and the biggest tray of Sharia-compliant products in Oman. This agreement will be beneficial for both entities and for the Islamic finance industry in the country.”

Bank Nizwa has been striving to introduce international Islamic banking best practises in the Sultanate through similar partnerships with other leading Islamic banks and windows.

*This article was published by Times of Oman. Read the original article here.