The central bank said it has given approval to establish Bank Nizwa to provide Islamic banking services inside Oman, adding that "it will consider any application to open windows for the Islamic banking by any bank operating in the sultanate wishing to provide such services."
But the central bank reversed its stance earlier in May saying it would allow for a wholly-Islamic financial institution, as well as Islamic branches of conventional banks. Existing banks in the Gulf state, however, will not be allowed to switch to become Islamic banks, a central bank official told Reuters. [ID:nLDE7420I7] Oman, a non-OPEC oil exporter with dwindling oil reserves, has been hit by nearly two months of demonstrations inspired by a wave of protests that has spread across the Arab world.
Islamic finance is estimated to be a nearly $1 trillion industry worldwide.