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State Council deliberates on bank deposits protection draft law

30 Jan 2024 State Council deliberates on bank deposits protection draft law

Muscat – During its third session of the eighth term, the State Council, led by H E Sheikh Abdul Malik bin Abdullah al Khalili, Chairman, held a discussion on the Draft Law on the Protection of Bank Deposits. 

The draft was referred by the Council of Ministers as a crucial step in reinforcing the country’s banking sector.

In his address, H E Khalili said that the session’s primary focus was to deliberate on the draft law, which is important in safeguarding bank deposits, aligning with Article 49 of the Council of Oman Law. The session also covered other topics pertinent to the council’s functioning.

The draft law is deemed essential for maintaining trust in the banking system and bolstering financial stability in Oman. It plays a crucial role in the financial safety network by offering protection to depositors. The law is designed to align with international standards, adhering to the systems and principles set by the International Association of Deposit Insurers and the Basel Committee on Banking Supervision.

A particularly notable aspect of the draft law is its adherence to the amendments of the banking law (Royal Decree 114/2000), which encompasses Islamic banking practices. 

The draft law seeks to encourage saving and elevate confidence in the financial health of Oman’s banking sector. It also aims to mitigate systemic risks within the banking industry, thereby enhancing overall financial stability.

Comprising 31 articles, the draft law is an update of the Bank Deposits Insurance System Law, initially issued via Royal Decree 9/95 and later amended by Royal Decree 70/2010.

The session concluded with a review of the Majlis A’Shura’s opinion on the draft law. Additionally, members were briefed on the general frameworks for preparing legislative proposals and studies by the council’s permanent committees, as well as a report on the activities of the council’s bodies. 

The chairman lauded the commendable efforts of the council members, acknowledging their dedication and the significance of their contributions to the council’s operations.

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