Oman’s first Islamic bank, Bank Nizwa and Al Hilal Islamic Banking Services from Ahli Bank have entered into an agreement which will facilitate interbank placements between the two enterprises.

The Wakala agreement is an important first step by the two banks to develop Oman into one of the frontrunners in the international Islamic banking space.

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 Shari’a compliant and follows the widely accepted AAOIFI (accounting and auditing organization for Islamic financial institutions) 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 co-operation 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.

Speaking at the signing ceremony, Dr Jamil Jaroudi, CEO 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 Shari’a 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, “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 offers 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 practices in the sultanate through similar partnerships with other leading Islamic banks and windows especially in core areas of Islamic finance. - TradeArabia News Service