## 1omnea2025003-print-pdf ## Source details **Canonical URL:** [1omnea2025003-print-pdf](https://www.imf.org/-/media/files/publications/cr/2025/english/1omnea2025003-print-pdf.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2025/english/1omnea2025003-print-pdf.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2025/english/1omnea2025003-print-pdf.pdf.json) --- ### Executive Summary: scope, methodology, and mission context - Scope and objective: - Central Bank Transparency Code (CBT) review of the Central Bank of Oman (CBO) covering the CBT five-pillar framework (governance; policies; operations; outcomes; official relations), excluding principles related to functions not performed by the CBO and issues covered by separate international standards. - Review maps CBO transparency choices against CBT best practices; it is intended to allow the CBO to evaluate its transparency practices and does not assess the quality or adequacy of governance and policies. - Approach and methodology: - Combined team desk review, CBO self-review, and in-depth discussions with CBO staff and stakeholders. - Sources: information disclosed by CBO (English/Arabic) and comprehensive self-review; conducted principle-by-principle considering timeliness, periodicity, and disclosure quality. - AI/ML tools supplemented findings and recommendations (Box 3). - Mission timing: June 30–July 11, 2024. - Mission appreciation: - Mission thanked Executive Management and staff; singled out staff—"most notably, Abdul Aziz, Mariam, Malak, and Raja". - Authorities’ response: CBO valued the review, called it "an invaluable opportunity for self-assessment", noted the CBO "has a strong focus on transparency, building on the Omani Vision 2040" and committed to follow-up on recommendations. ### Background: macro-fiscal and banking sector indicators - Economic and fiscal context: - Progress on fiscal and external positions and Vision 2040 implementation. - Economic activity recovered supported by favorable oil prices; inflation remains low. - Fiscal and current account balances turned into surpluses; public sector debt reduced through windfall savings deployed to prepay debt. - Banking sector resilience and indicators (as stated in source): - Non-Performing Loans (NPLs) = 4.4 percent in June 2023. - Loan-loss provisioning = around 69 percent. - Banks' foreign liabilities = around 10 percent of total liabilities at end-June 2023. - Net FX open position to capital ratio = around 13 percent. - Banks were not affected by global banking turmoil in early 2023 due to CBO oversight and banks’ domestic oriented model. - Key policy progress: - Progress on liquidity forecasting, collateral and Emergency Liquidity Assistance (ELA) frameworks, and establishment of a Treasury Single Account (TSA). - Loan deferral program expired at end-September 2022; remaining relaxation of prudential measures still in place. - Transitioning towards a new bottom-up stress testing framework in addition to existing macroprudential stress testing. - AML/CFT developments: - Oman has a 2023–2025 enhanced AML/CFT national strategy; CBO developing its AML/CFT department. - Oman undergoing MENAFATF mutual evaluation in 2023–2024. - IMF assisted on beneficial ownership transparency, use of financial intelligence, and targeted financial sanctions. ### Main findings — overall stance and legal anchoring - CBO has a strong focus on transparency anchored in law; this CBT review is the first in the GCC region. - Many transparency gaps identified as “quick wins” because relevant policies/operations already exist but are not fully disclosed. - Key cross-cutting transparency gaps: - Limited disclosure of internal governance instruments (by-laws, Rules of Procedure, committee charters). - Incomplete publication of full audited financial statements with explanatory notes and accounting policies. - Lack of public risk statements, risk appetite/tolerance, and detailed risk governance disclosures. - Limited disclosure of ELA framework (completed but not published as of review), counterparty/collateral frameworks, and reserve investment guidelines. - Official relations: cooperation arrangements (MoUs, delineation of roles with government/domestic agencies/foreign entities) are often not publicly disclosed. - Communications: PDF-only data dissemination, limited plain-language outreach, absence of a published communications policy and calendar. ### Governance (Pillar I) — findings and recommended disclosures - Governance findings: - Basic information published on organizational structure, Board and senior management, and decision-making process; many internal governance instruments are not publicly available. - Autonomy assessments (institutional/functional/financial/personal) show legal provisions exist but practical transparency on autonomy is limited (reviews of certain principles marked Not Implemented or Core). - Risk management: RMQ has ISO-based ERM framework; external disclosure of CBO’s own principal risks and ERM details is minimal. - Audit and internal controls: quarterly Statement of Financial Position and Income Statement published; full annual audited financial statements with notes not published. - Anti-corruption and ethics: Banking Law includes provisions but no published Anti-Bribery and Corruption Code of Conduct, Whistleblowing policy, or public anonymous reporting mechanism. - Human capital: staffing/employment policies treated as confidential; no public staffing statistics or compensation band disclosures. - Governance recommendations (select): - Publish by-laws, Rules of Procedure, committee charters, committee compositions, and internal circulars relevant to governance. - Publish access-to-information policy; disclose ARC and IA charters, membership and key activities; publish full audited financial statements with explanatory notes and external auditor’s opinion. - Publish a general risk statement mapping key risks to the mandate, risk appetite/tolerances, and a high-level risk governance structure. - Commit to and publish Anti-Bribery and Corruption, Code of Conduct, and Whistleblowing policies. - Expand careers page and Annual Report disclosures on human capital statistical aggregates and compensation bands. ### Policies, operations, and outcomes (Pillars II, III, IV) — monetary policy, FX, reserves, and macroprudential - Monetary policy and peg management: - CBO maintains a fixed peg of the rial against the U.S. Dollar through proactive liquidity management and sufficient reserves. - Historical peg details: Omani rial pegged at 1 rial to 2.6008 USD since 1986; source also notes past parity expressed as 0.384/0.385 Omani rial per U.S. dollar (page-level references). - Operational linkage: policy (repo) rate set referencing the upper limit of the U.S. target federal funds rate (TFFR) plus an additional spread of 50 basis points as a risk premium. - Since 2022 CBO discloses repo rate decisions via press releases; but Committee for Operational Monetary Policy composition, role and procedures not published. - Recommendations: disclose Operational Monetary Policy Committee composition/functions; publish operational target, counterparty framework, eligible collateral list and haircut/pricing, reserve requirement calibrations (remuneration/maintenance period), and provide data in machine-readable formats (Excel/CSV). - Foreign exchange and reserve management: - FX regime: fixed peg and active FX management (Spot, Swaps, Forward, foreign exchange swaps offered to banks). - Reserve governance: Board oversight, RAMC and IC referenced; FXRAP segmented into Liquidity, Bridge, and Income Tranches; Investment Guidelines and benchmarks not disclosed. - Recommendations: publish Investment Guidelines, benchmarks, risk parameters, counterparty selection criteria, and consider a dedicated Report on International Reserves with governance, exposures, benchmarks, and reserve adequacy assessment. - Macroprudential policy, financial stability, and stress testing: - Financial Stability Report (FSR) issued annually with stress-test design, scenarios, and coverage; macro stress test covers nine domestic banks representing more than 95 percent of banking sector assets (FSR 2023, page 54). - JFSC exists as advisory body chaired by CBO Executive President; composition and outcomes not disclosed. - Recommendations: publish a single macroprudential framework document, clarify decision-making and coordination modalities, publish ex-post evaluations of policy actions and stress-test data/methods, and clarify enforcement regime. - Emergency Liquidity Assistance (ELA) and lender-of-last-resort: - ELA Framework completed and reviewed with Ministry of Finance but not published as of July 2024; CBO intends to publish a public version once approved by the Board of Governors. - IMF technical cooperation scheduled to assist finalization of ELA and emergency readiness frameworks. ### Operational transparency: monetary operations, counterparties, and market infrastructures - Operational disclosures and gaps: - Instruments listed: Repo/Reverse repo, Discount/Rediscount of Commercial Papers, Certificates of Deposit, Discount of Treasury Bills, Foreign Exchange Swaps, Direct Lending of US Dollars to Local Banks. - Missing detailed public disclosure of approved eligible collateral lists, haircut/pricing policies, counterparties eligibility criteria, reserve requirement details (ratios, remuneration, averaging/maintenance), and operational target definition. - Financial market infrastructure and FX market data: FX market turnover and market-maker agreements not published; regulations permit FX exposure up to 40 percent of Tier 1 capital. - Recommendations: - Publish operational target and all operational terms (eligible collateral, haircuts, counterparties), publish FX market turnover data and market-maker agreements, and provide centralized, machine-readable data hub. ### Financial integrity (AML/CFT) and consumer protection - AML/CFT: - CBO is the AML/CFT supervisory authority for entities under its oversight; guidance and circulars issued (link referenced in source). - CBO does not provide financial services to the public and therefore lacks an internal AML/CFT control function. - Disclosure limited on human and technical resources for AML/CFT supervision; outcomes and enforcement detail in Annual Report are insufficient. - Recommendation: leverage upcoming mutual evaluation publication to communicate implementation processes and outcomes; publish more detailed AML/CFT supervisory outcomes and resource allocation where appropriate. - Consumer protection and financial inclusion: - FCPRF published 21 August, 2023 (circulars BM 1184, FM 37, ME 36) covering five core principles; Customer Service Department (CSD) established. - Complaint handling: banks must have internal mechanisms; consumers can submit complaints via CBO website or Customer Service Office; CSD establishing periodic complaint statistical reports. - Surveys: Financial Literacy Survey used to prepare Awareness Campaign Plan 2024; Customer Satisfaction Survey conducted in cooperation with Ministry of Labor (Ijadaa Initiative). - Recommendations: publish CSD role and dispute-resolution procedures, unified service catalogue, periodic complaint reports, and a dedicated consumer protection report in the Annual Report. ### Official relations (Pillar V) — government, domestic agencies, and international engagement - CBO–government coordination: - Banking Law lists functions for the benefit of the Government, and Article 26 designates CBO as government banker and fiscal agent, with advance limits (Article 26(c): advances up to a certain limit repayable within 90 days). - Gaps: procedures, accountability arrangements, information-sharing practices, and outcomes of coordination with government not disclosed. - Recommendations: disclose mechanisms and terms (e.g., MoUs with Ministry of Finance), regular reporting on interactions beyond bond issuance, and disclose whether bonds are the only instruments used with the Government. - Relationships with domestic financial agencies: - Executive President of Financial Services Authority sits on CBO Board, but practical arrangements and information-sharing modalities are not disclosed. - JFSC: composition described but responsibilities, deliberations, and outcomes not disclosed. - Recommendations: clarify and publish composition, responsibilities, and outcomes of JFSC and bilateral agreements with domestic agencies. - International engagement: - Banking Law empowers international cooperation; CBO active internationally and discloses some engagements in Annual Report and press releases, but MoUs and agreements generally not published. - Recommendations: create a dedicated section on CBO website and Annual Report for international engagement, disclose international agreements where possible, and summarize objectives and outcomes of participation in international forums. ### Communications, public affairs, and outreach - Current communications practice: - CBO maintains English and Arabic website with accessibility features, social media presence on Instagram, LinkedIn, X, and YouTube, and publishes reports (Annual Report 2022; FSR 2023; MSR 2023; Payment Systems Report 2018-2022; statistical bulletins; occasional papers). - Data dissemination primarily in PDF format only. - AI/ML Box 3 findings (analysis of 45 English press releases Jan 2020–Mar 2024): - Policy attention (repo rate communications, 78 sentences from 11 press releases): 45 percent pertain to policy rate decisions, 37 percent to exchange rate considerations, 18 percent reference inflation. - Comprehensibility (Flesch–Kincaid): review of banking and financial stability = “fairly difficult”; repo rate decision = “difficult”; macroeconomic stability report = “very confusing”. - Years of education required: financial stability report = 9; repo rate decision = 13; macroeconomic stability report = 17. - Comparative clarity: CBO communication more comprehensible than other GCC countries sampled but less clear than a larger peer group with same monetary policy arrangement. - Audience targeting: primary audience appears to be the financial sector. - CBO has begun disclosing repo rate decisions since 2022 and shares infographics on social media; stakeholders perceive communications as insufficiently clear for general public. - Communications recommendations: - Develop and publish a communications policy and communications strategy with measurable outreach objectives and a publication calendar. - Provide simplified summaries and Citizen Reports for non-specialist audiences, adopt different language styles for general and specialized audiences, use videos/infographics, and broaden machine-readable data dissemination (Excel/CSV). - Improve website search and topical organization; publish legal/regulatory documents and circulars by subject. ### Implementation roadmap, next steps, and IMF support - Suggested next steps and priorities: - Publish an access-to-information policy; disclose governance instruments, risk framework summaries, audited financial statements with notes, and ELA public framework once approved. - Publish operational frameworks: collateral, counterparty, reserve investment guidelines, macroprudential framework, and clarify CBO–government/agency interaction modalities. - Enhance public engagement via simplified disclosures, outreach programs, social media, and Citizen Report development. - Implementation support: - A detailed Implementation Roadmap (informally shared by the mission—Detailed Review Table) would assist authorities in following up on findings. - The IMF stands ready to provide further assistance as needed. *Source: IMF staff executive summary and detailed Central Bank Transparency Code review for the Central Bank of Oman (mission June 30–July 11, 2024).* ### EXECUTIVE SUMMARY __________________________________________________________________________ 4 ### EXECUTIVE SUMMARY ### Scope and Objective - The mission conducted a Central Bank Transparency Code (CBT) review of the Central Bank of Oman (CBO). - The review covers the CBT’s five-pillar framework, excluding principles related to functions not performed by the CBO and excludes transparency-related issues covered by separate international standards (e.g., financial sector supervision, oversight of financial market infrastructures, and bank resolution). - The review maps the CBO’s transparency choices against CBT best practices for: (i) governance; (ii) policies; (iii) operations; (iv) outcomes; and (v) official relations. - The review is intended to allow the CBO to evaluate its transparency practices; it does not assess the quality or adequacy of the CBO’s governance and policies. ### Approach and Methodology - The review combined a team desk review, a CBO self-review, and in-depth discussions with CBO staff and key stakeholders. - Sources included information disclosed by the CBO on its website and other media in English or Arabic, and a comprehensive self-review provided by the CBO. - The review was conducted principle-by-principle and considered timeliness, periodicity, and quality of disclosure (accessibility and ease of understanding, especially for the general public). - Artificial Intelligence/Machine Learning (AI/ML) tools were used to supplement the mission’s findings and recommendations with additional comparative insights (see Box 3 in source). - The review recognizes the role of the domestic legal framework and notes that an upcoming new Banking Law provides an opportunity to address transparency aspects raised. ### Background - Economic and fiscal context: - Oman has made substantial progress in strengthening its fiscal and external positions and implementing Vision 2040. - Economic activity has recovered, supported by favorable oil prices and sustained reform momentum. - Inflation remains low. - Fiscal and current account balances turned into surpluses on the back of high energy prices and prudent fiscal management. - Public sector debt has been reduced markedly as windfall savings were deployed to prepay debt. - Banking sector resilience and indicators: - Non-Performing Loans (NPLs) remained contained at 4.4 percent in June 2023. - Loan-loss provisioning around 69 percent. - Banks' foreign liabilities represented around 10 percent of total liabilities at end-June 2023. - Net FX open position to capital ratio around 13 percent. - Banks were not affected by the global banking turmoil in early 2023 due to CBO’s prudent oversight and banks’ domestic oriented business model. - Key policy progress and recommendations: - Progress made on liquidity forecasting and formulation of collateral and Emergency Liquidity Assistance (ELA) frameworks. - Progress on establishment of a Treasury Single Account (TSA) at the CBO through collaboration with the Ministry of Finance. - Exiting from COVID-19 related financial stability support measures has taken place to a certain extent; the loan deferral program expired at the end of September 2022, with remaining relaxation of prudential measures still in place. - Transitioning towards a new bottom-up stress testing framework, in addition to the existing macroprudential stress testing framework. - AML/CFT developments: - Oman has a 2023–2025 enhanced AML/CFT national strategy to align with FATF standards and address digitalization and fintech. - The CBO is developing its recently established AML/CFT department through staffing and training. - Oman is undergoing the mutual evaluation process by the Middle East and North Africa Financial Action Task Force (MENAFATF) in 2023–2024. - The Fund assisted authorities on beneficial ownership transparency, use of financial intelligence, and implementation of targeted financial sanctions. ### Main Findings - Overall transparency stance and legal anchoring: - The CBO has a strong focus on transparency, building on Vision 2040, and has a transparency framework firmly anchored in the law. - The CBT review is the first in the GCC region and reflects the authorities’ commitment to strengthening the CBO’s role as a critical public institution. - Governance (Pillar I): - The CBO provides basic information on organizational structure, the Board and senior management, and its decision-making process. - Opportunities for enhancement include greater emphasis on independence, internal accountability, and risk management. - Specific suggested disclosures: an access-to-information policy, enhanced transparency over the risk management framework and operational risk management function, and disclosure of oversight arrangements. - Many additional disclosures are “quick wins” because relevant policies and operations already exist. - Policies, Operations, and Outcome (Pillars II, III, IV): - Monetary policy and peg management: - The CBO maintains a fixed peg of the rial against the U.S. Dollar through proactive liquidity management, bolstered by sufficient foreign exchange reserves, and a robust, resilient, and well-regulated banking system. - The CBO discloses objectives and the policy framework, including detailed explanation of how monetary policy is implemented and the significance of liquidity management in maintaining the peg. - Transparency gains possible on disclosure of decision-making processes and bodies, and on data dissemination in forms enabling more effective external use. - Additional improvements could include publication of an extensive counterparty framework, the collateral framework, and reserve requirement calibrations. - Financial stability, ELA and macroprudential: - The CBO has a legal mandate for financial stability and has acquired new tools by law, including responsibilities for Emergency Liquidity Assistance (ELA) and macroprudential policy. - The CBO has strengthened transparency of its shared involvement on financial stability issues but more transparency is warranted on its mandate, tools available, and delineation of roles with other institutions. - AML/CFT supervisory role: - The CBO is the designated AML/CFT supervisory authority for financial institutions under its oversight. - The CBO does not provide financial services to the public and therefore does not have an internal AML/CFT control function. - The CBO discloses relevant information on AML/CFT supervisory powers, policies, and related legal framework, and sometimes on implementation (off-site supervisory framework, good and poor practices, sanctions, training). - Leveraging the upcoming publication of the mutual evaluation, the CBO could communicate further information on implementation processes and outcomes achieved from its AML/CFT powers and responsibilities. - Official relations (Pillar V): - The CBO refrains from fully disclosing cooperation arrangements (e.g., Memoranda of Understanding) and relations with government bodies, domestic public financial agencies and foreign entities, even where counterparts have released such information. - Improved disclosure of official relations would enhance the credibility of the CBO transparency framework. - Public engagement and outreach: - There appears to be broad appetite from the general public for deeper engagement with the CBO. - Consideration could be given to providing simplified versions of key disclosures, deepening educational and outreach programs, and broadening communication tools (including social media). ### Recommendations and Next Steps - Disclosure and governance enhancements: - Consider publishing an access-to-information policy. - Enhance transparency on the CBO’s risk management framework and operational risk management function. - Disclose oversight arrangements to strengthen internal accountability. - Policy and operations transparency: - Improve disclosure of decision-making processes and institutional bodies related to monetary policy and FX management. - Publish detailed counterparty frameworks, collateral frameworks, and reserve requirement calibrations. - Provide clearer public descriptions of ELA and macroprudential toolkits and delineation of roles with other institutions. - AML/CFT transparency: - Use the mutual evaluation publication to communicate implementation processes and outcomes from AML/CFT supervisory activities. - Official relations: - Increase transparency regarding cooperation arrangements with government bodies, domestic public financial agencies, and foreign entities. - Public engagement: - Provide simplified summaries of key disclosures. - Deepen educational and outreach programs and expand communication channels, including social media. - Implementation Roadmap: - A detailed Implementation Roadmap—informally shared by the mission and consisting of all findings and recommendations in the Detailed Review Table—would assist authorities in following up on the mission’s findings. - The IMF stands ready to provide further assistance if and where needed. *Source: IMF staff executive summary of the Central Bank Transparency Code review for the Central Bank of Oman.* ### Box 1. Oman: Vision 2040 and CBO Transparency ### Box 1. Oman: Vision 2040 and CBO Transparency ### Vision 2040: scope and relevance for the CBO - “Vision 2040” is Oman’s overarching strategy for economic and social planning for the period 2021-2040, and the foundation for the respective national sector strategies and five-year development plans. - Vision 2040 has 4 key pillars: (i) a society of creative individuals, (ii) an environment with sustainable components, (iii) responsible state agencies, and (iv) a competitive economy. - Within these pillars, 12 priority areas have been set. Of relevance for the Central Bank of Oman, these include, i.a.,: (i) legislative, judicial, and oversight system; (ii) governance of state’s administrative bodies, resources, and projects; (iii) the private sector, investment, and international cooperation; (iv) economic leadership and management; (v) economic diversification and fiscal sustainability. - The current five-year development plan was launched on January 1, 2021 (covering the period 2021–2025), and includes targets for further enhancing the State’s administrative bodies, enhancing finance, and developing laws and regulations in line with international standards. - Though the mission could not ascertain the direct link between Vision 2040 and enhanced CBO transparency (e.g., in terms of Key Performance Indicators for the CBO as part of the Vision), central bank transparency will contribute to strengthening Oman’s position, and that of the CBO in particular, within various pillars. - International indicators outlined by the Omani authorities include indices with transparency components related to global competitiveness, government effectiveness, regulatory quality, governance, ease of doing business, as well as the overall attractiveness for foreign investors. - Enhanced CBO disclosure practices, and strong overall transparency by the central bank, will allow the CBO to contribute directly or indirectly to the implementation of numerous Vision 2024 priority areas. ### CBO mandate, structure, and functions - The CBO has a multi-faceted mandate, and is an integrated monetary authority, banking supervisor, and resolution authority. - The Banking Law assigns a monetary and financial stability mandate to the central bank, in addition to facilitating the free-market economy and contributing to fiscal and monetary development of the Sultanate. - The CBO’s consumer protection mandate was established in 2023 and is being developed further. - Governance and appointments: - The CBO is managed by a seven members Board of Governors, appointed by the Sultan for a five-year term, and includes the Minister of Economy as Deputy Chairman, the Undersecretary of the Ministry of Finance, the Executive President of the Financial Services Authority, and three other members. - The Board is responsible for all policy matters. - The Executive President, appointed by Royal Decree, is responsible for implementing Board policies and decisions and for executive management of the CBO; the Executive President is not a member of the Board. - The Law includes a specific provision on confidentiality requirements for Board members and staff. - Legal and regulatory scope: - The Banking Law contains chapters on microprudential (banking) supervision, resolution, and Islamic Banking. - The Anti-Money Laundering Law guides the CBO’s roles and responsibilities on AML/CFT. - Auxiliary tasks and entities: - The CBO operates a Fintech Regulatory Sandbox and the College of Banking and Financial Studies (CBFS). The CBFS is an autonomous educational organization; its Chairman and Deputy Chairman are drawn from the CBO. - Oman’s independent Credit and Financial Information Center (Mala’a) is supervised by the CBO. - The CBO operates two branches: one in Salalah and one in Sohar, in addition to its headquarters in Muscat. - Exchange rate regime: - Oman has a fixed exchange rate regime. The Omani rial has been pegged to the US dollar at a fixed rate of 1 rial to 2.6008 USD since 1986. - The Banking Law 2000 states that “the para value of the Rial Omani shall be determined from time to time by His Majesty the Sultan (...) in accordance with the conditions of any international monetary agreement to which the Sultanate is then a party.” - Depending on day-to-day movements of the USD vis-à-vis other currencies, the exchange rate of the rial changes accordingly. - The main objective of the peg is to promote trade, investment, and growth in Oman, while establishing orderly monetary conditions. - Financial stability framework: - The CBO’s Macroprudential Oversight Department (MPOD) conducts regular monitoring and analysis of systemic risks with view on the financial-economic system and international possibly influential factors. - A Joint Financial Stability Committee (JFSC) was set up to strengthen financial regulatory coordination and create a surveillance framework for market trends. The JFSC is chaired by the CBO Executive President, with the Executive President of the Financial Services Authority as Vice Chair and other senior representatives from relevant governmental entities. - The CBO operates and regulates the country’s National Payment Systems. ### Consumer protection and financial inclusion (Box 2) - Legal framework and institutional arrangements: - The CBO is the regulator and supervisor of banks and various other financial institutions. - In 2023, the regulatory framework for protecting financial consumers was enacted, aimed “at achieving better outcomes for consumers, ensuring fairness and transparency in providing financial products and services to consumers” (see: “Responsible Finance - The Role of the Central Bank of Oman in protecting consumers availing financial services,” page 1). - The CBO created its Customer Service Department (CSD) to implement consumer protection policies and the dispute resolution mechanism. - Disclosure and transparency of fair treatment and business conduct measures: - The Regulatory Framework ensures that issues regarding fair treatment and business conduct of financial institutions are disclosed and disseminated to the public. - A monitoring system is put in place to supervise the correct implementation of the consumer protection framework, and its disclosure to financial services consumers. - Dispute resolution mechanism: - The regulatory framework establishes that all financial institutions should offer their customers a dispute resolution mechanism if claims arise. The financial institution would be the first point of receipt of a claim. - Consumers have the right to present their claim to the CBO. - The CBO is currently working on establishing a dispute resolution mechanism and procedure to ensure prompt redress, if merited by the claim. - Financial education: - The CBO conducts financial education activities that include consumer protection as priority. - The strategy is conducted jointly with several CBO stakeholders, implementing specific programs tailored to vulnerable sectors of society, and disseminating educational material on consumer protection. - Initiatives have been launched through a variety of communication tools, including social media to achieve further dissemination and awareness of consumer protection rights. - Onsite supervision: - To ensure that credit institutions comply with the provisions of the law and regulations in force on customer protection, the CBO conducts thematic onsite inspections on market practices. - Those actions should be disclosed by the Reporting Mechanism established and disseminated to the media. - Accountability recommendation: - The new system of financial protection for consumers might be accompanied with a strong accountability system from the CBO to the public. - It would be advisable to compile and publish a dedicated report on consumer protection and the role of the CBO in the near future. ### Communications, publications, and transparency practices - The CBO maintains an English and Arabic website with various functionalities (including accessibility features for vision-impaired users) and publishes legal framework material and numerous other publications. - Examples of publications (most recent as noted in source): - Annual Report (most recent: 2022) - Financial Stability Report (most recent: 2023) - Macroeconomic Stability Report (most recent: 2023) - Payment Systems Report (covering 2018-2022) - Quarterly and Monthly Statistical Bulletins - Occasional Papers (recent papers from 2023 include topics such as forecasting currency in circulation, inflation dynamics, and labor market analysis) - Statistical publications, Almarkazi (the CBO’s e-magazine), and other reports including one on the CBO’s role on consumer protection, and a report on banking competition and concentration issues and implications for Omani financial stability. - Note: After the CBT mission, the 2024 FSR was published, but documents published after conclusion of the mission are not taken into account for the report. ### Main findings — Pillar I. Transparency in Governance (summary of recommendations and observations) - Legal framework accessibility and clarity: - The legal framework governing the CBO is well explained in the Banking Law, though accessibility can be improved. - Recommendation: increase accessibility of the CBO's legal framework on the CBO’s website by including all relevant laws and regulations, circulars, guidelines, procedures, etc. by subject, and provide a basic summary of the most important regulations that govern the Bank. - Mandate clarity: - The long list of objectives in the Banking Law can be confusing to the general public as the objectives are not ranked. - Recommendation: explain on the website how the CBO pursues its objectives in practice and disclose a full list of functions and powers. - Board autonomy and governance disclosures: - Recommendation: consider disclosing further information on the autonomy of the members of the Board of Governors, the personal autonomy of its members, and publish the Bank's budget rules and the rules on monetary financing on the website. - Recommendation: increase transparency by providing information on rules of procedure and internal circulars concerning governance, allocation of responsibilities across decision-making bodies, internal committees, their functions, and composition. - Risk disclosures: - The CBO’s Risk Management and Quality department (RMQ) oversees risk management, business process quality, and business continuity planning and has implemented an ISO standard based Enterprise Risk Management (ERM) framework. - Public disclosures lack an institutional view on the bank’s risk management framework and disclosures on the CBO’s risk exposures are marginal. - Recommendations: - Publish a general risk statement mapping key risks to its mandate and the CBO’s tolerance for these risks. - Publish the overall strategy to manage these risks. - Expand disclosure of a risk governance structure including the role and key responsibilities of the risk management function, its reporting relationship to management and the Audit and Risk Committee (ARC), and reporting frequency on key risks. - Include in the Annual Report a section discussing CBO’s risk management framework, actions to identify/evaluate/mitigate risks (financial, operational, strategic, legal, and potentially environmental), and disclose velocity of any changes in risk profiles during the reporting period. - Provide additional information on composition, powers, roles, and responsibilities of both the ARC and RMQ functions. - Financial statements and audit transparency: - The CBO publishes the minimum required by Banking Law Article 17—Reports being a quarterly Statement of Financial Position and Income Statement alone. The Annual Report includes the external auditor’s report. - As required by Article 38—Accounting, the CBO complies with International Financial Reporting Standards (IFRS) with some exceptions as provided for in the Banking Law, but this is not clearly disclosed in available documents nor the external auditors report. - Recommendation: publish the full set of annual audited financial statements including explanatory notes, accounting policies, and the external auditor’s opinion, with an external auditor’s report that could state “the CBO complies with IFRS except for ...” if exceptions exist. - Audit and oversight disclosures: - Transparency on the ARC and Internal Audit (IA) is limited beyond published organizational structure. - Recommendations: - Publish ARC’s membership and responsibilities as set out in its Charter, and key activities undertaken during the previous financial year including oversight of financial reporting, internal and external audit, and, if applicable, oversight of risk management and compliance. - Publish IA scope and responsibilities (or its Charter), rules governing independence and reporting lines, basis for audit methodology and conformance with Institute of Internal Auditor’s international standards, and a high-level description of IA activities undertaken during the previous financial year. - Anti-corruption, code of conduct, and whistleblowing: - The Banking Law includes anti-corruption and internal code of conduct provisions, but the CBO does not have an explicit Anti-bribery and Corruption, Code of Conduct nor a Whistleblowing policy, nor a public means for anonymous reporting of unethical practices. - Article 24—Declaration of Confidentiality aligns with Omani Protection of Public Funds and Conflict of Interest Avoidance No. 112/2011, requiring staff to sign a Declaration of Confidentiality and provide a disclosure of financial interests upon being employed by the CBO, though such declarations are not re-performed post-hiring. - Recommendations: - Commit to and publish a written Anti-Bribery and Corruption, Code of Conduct (and Ethics), and Whistleblower policies on the website. - Disclose how the CBO applies relevant articles of the Banking Law, the Penal Code, and, to the extent covered, its Staff Regulation of the Central Bank 2004. - Publish aggregated information on investigations conducted and actions taken under the various policies. - Human capital transparency: - The CBO applies its Staff Regulation of the Central Bank 2004 and is exempt from Government of Oman’s staffing regulations; staffing and employment policies are considered confidential. - The CBO does not disclose human capital statistics, compensation, benefits, diversity and inclusion policies, or succession planning. - Recommendations: - Expand the careers page to include: (i) enhanced statistics on CBO staff (total number of staff, breakdowns for HQ and branches, breakdown by functions); (ii) ranges and components of the CBO’s total compensation package including salary bands plus a general description of staff benefits and other allowances; (iii) recruitment policies including policies for attracting, promoting, and retaining staff; (iv) education and development opportunities; and (v) relevant information on leadership and succession planning. - Consider including in the Annual Report graphical or tabular representations reflecting number of staff, diversity metrics, area of activity (by department, management vs. staff, core vs. support, etc.), average tenure, and average age, as well as a summary of key activities of the human resources department during the year. *Source: IMF staff; https://www.oman2040.om.* ### 25. The CBO is progressively taking measures to revamp its system of institutional affairs ### 1omnea2025003-print-pdf - 25. The CBO is progressively taking measures to revamp its system of institutional affairs ### Institutional communications and public affairs - The CBO is progressively taking measures to revamp its system of institutional affairs (public affairs) and institutional communications. - Recommendation: develop and disclose a communications policy anchored on CBO transparency objectives. - Recommendation: implement a corresponding communications strategy tailored to specific needs or short-term objectives, aligned with existing CBO objectives, tasks, and functions to strengthen an effective transparency framework. ### Transparency, accessibility, and publications - The CBO is actively diversifying communication tools to increase accessibility and clarity. - Improvement opportunity: enhance website search methods by allocating data not only by date but also by linking it to specific topics. - Observation: the quality of information disclosed by the CBO is highly appreciated by stakeholders, but the quantity of analytical information could be increased and made available on the website. - The CBO promotes messages via mass and social media and other modern tools to better engage the public, but: - Recommendation: strengthen regular publications—CBO reports, financial regulations and research papers should be published based on a pre-established calendar to assure timeliness and accessibility and manage stakeholders’ expectations. - Current data dissemination format: PDF only—this poses challenges for external parties wishing to utilize the data for independent analysis. ### Outreach, audiences, and communications strategy - Recommendation: communications strategy should include measurable objectives for outreach and the selection of communication campaigns. - Recommendation: continue expanding educational and public outreach programs targeted at specific audiences: business community, parliamentarians, academia, students, financial sector, etc. - Recommendation: for the public in general, implement educational outreach by thematic clusters (examples: financial inclusion, financial literacy, and consumer protection). - Finding: CBO’s intended audiences are mostly financial institutions based on analysis of macroeconomic stability report and sentence references to economic agents. ### Confidentiality and legal certainty - Recommendation: significantly strengthen dissemination and disclosure of the confidentiality framework determined by legislation and confidentiality policies implemented by the CBO to enhance transparency of the confidentiality system itself and provide legal certainty. ### Monetary policy, FX management, and Emergency Liquidity Assistance (ELA) - Primary monetary policy goal: ensure the stability of the exchange rate. - Operational approach: maintain fixed peg of local currency against the US Dollar through proactive liquidity management, bolstered by sufficient foreign exchange reserves, and a robust, resilient, and well-regulated banking system. - Historical peg detail: Since 1973, the nominal anchor has been the exchange rate peg to the U.S. dollar (USD). Following the last adjustment in parity in 1986, the Omani rial has been pegged at 0.384/0.385 Omani rial per U.S. dollar. - Disclosure: CBO discloses objectives and policy framework supporting monetary policy on its website, including detailed explanation of liquidity management as the intermediate target. - Transparency gaps: - Decision-making process undisclosed: the CBO does not release information regarding the Committee for Operational Monetary Policy, including its role, composition, and operational procedures. - Recommendation: publicly disclose composition, functions, and responsibilities of the Operational Monetary Policy Committee. - Recommendation: disclose the counterparty framework, collateral framework (eligibility, valuation, and haircut), and reserve requirement calibrations (remuneration and maintenance period). - Operational framework: intermediate targets, objectives, and tools are disclosed; outcomes documented in annual and financial stability reports. - Communication practice: since 2022, CBO has begun disclosing monetary policy decisions (repo rate) through press releases following each meeting of the US Federal Open Market Committee (FOMC) and shares infographics on social media. - Stakeholder perception: most stakeholders perceive the CBO's policy communications as insufficiently clear. - Recommendation: improve clarity of policy communication and actively engage the general public by conveying monetary policy messages in non-technical language. - ELA framework status: CBO does not currently possess a formalized Emergency Liquidity Assistance (ELA) framework in published form; the ELA Framework has been developed, reviewed, and is subject to further discussion with the Ministry of Finance (MoF), and has not been published yet. ### Box 3 — CBO Policy Communication Transparency and AI/ML findings - Scope: mission examined 45 English press releases published by the CBO between January 2020 and March 2024 (rate decisions, macroeconomic stability reports, Reviews of Banking and Monetary Development); AI/ML tools used for language processing. - NLP framework: three key communication aspects identified—(i) Policy Attention; (ii) Comprehensibility; and (iii) Audiences. - Machine learning techniques applied: - Flesch–Kincaid metrics (Ease of reading and Grade level) to assess clarity. - SetFit (LLM) to classify policy message attention into inflation and exchange rate. - CentralBankRoBERTa (LLM) to measure target agent of communication. - Policy attention findings for repo rate communications: from analysis of 78 sentences extracted from 11 press releases: - 45 percent of the sentences pertain to policy rate decisions, - 37 percent to exchange rate considerations, - 18 percent reference inflation. - Comprehensibility findings: - According to the Flesch-Kincaid reading ease index, the review of banking and financial stability, the repo rate decision, and the macroeconomic stability report are categorized respectively as “fairly difficult,” “difficult,” and “very confusing” to understand. - Years of education required to comprehend documents: financial stability report = 9, repo rate decision = 13, macroeconomic stability report = 17. - Repo rate decision clarity has improved over time. - Comparative clarity: - CBO communication comprehensibility is better than other GCC countries but more difficult compared to a larger group of peers with the same Monetary Policy (MP) arrangement. - Readability is country-specific and influenced by policy regime, exchange rate arrangement, and document length. - Relative to selected GCC countries (Saudi Arabia and United Arab Emirates), CBO communication clarity was more stable throughout the year 2023. - Audience targeting: analysis indicates the primary audience is the financial sector; similar result from review and banking stability reports. - Recommendations from Box 3: - Adopt different language styles for general and specialized audiences to convey the same message effectively. - Use social media and infographics but simplify technical terminology (examples of technical terms: 'repo rate' and 'operational target'). - Leverage development of a Citizen Report to inform non-specialized agents more effectively on CBO operations and policy decisions. ### Foreign exchange and reserve management - Disclosure gaps for cross-border financial flows and FX administration: enhance disclosure in an accessible and easy to understand manner on objectives, framework, and decisions; consider separate sections on foreign exchange regulations on the website. - Role: CBO assumes dual role—rulemaking power and supervisor of compliance of main regulations. - Recommendation: disclose supervisory procedures followed or relevant CBO decisions and accompanying explanatory information. - Reserve management transparency: - CBO provides information on legal and governance framework managing foreign reserves. - Investment policy is not disclosed: useful information on portfolio composition, eligible asset classes, risks considered, and monitoring procedures are not published. - Annual Report contains information on foreign reserve management, but further description of decisions and results achieved would benefit transparency. - Recommendation: provide more information on the selection of benchmarks and a dedicated section on foreign reserves to disclose practices, decisions, and supporting analysis. ### Financial stability and macroprudential policies - Financial Stability Report (FSR): issued annually and contains a comprehensive assessment of vulnerabilities of the Omani financial system. - Stress tests: - CBO conducts annual stress tests to assess resilience of the domestic banking sector. - Methods and key assumptions are explained in the FSR, including types of institutions covered and number of institutions. - Stakeholders generally believe stress test results served their purpose, particularly given a well-capitalized banking sector resilient to significant adverse scenarios. - Joint Financial Stability Committee (JFSC): - JFSC is formed to assist in shaping financial-economic regulatory philosophy. - Chaired by the Executive President of CBO, Vice Chair is the Executive President of the Financial Services Authority, with other senior representatives from relevant governmental entities. - JFSC is an advisory committee and does not undertake action; it does not issue recommendations or press releases. - Macroprudential policy disclosure: - CBO website contains links to macroprudential policy circulars but these do not contain a conceptual framework or a macroprudential policy strategy. - CBO publicly announces adjustments to macroprudential policy tools, but timeliness of such announcements is unclear. - Decision-making process leading to macroprudential decisions is not sufficiently clear. - Stakeholders generally felt the rationale for policy decisions was well disclosed in the FSR. - Accessibility issue: macroprudential instruments are spread over several circulars, making access difficult. - Enforcement: enforcement circular based on the Banking Law applies to the CBO's entire regulatory framework, including for enforcement of macroprudential regulations. - Recommendation: consider explaining in the FSR and/or on the website the CBO’s responsibility for macroprudential policies and how it collaborates with other domestic agencies. ### Financial integrity (AML/CFT) - The CBO is the designated AML/CFT supervisory authority for financial institutions under its oversight and plays a key role in safeguarding integrity and soundness by ensuring compliance with AML/CFT preventive measures. - The CBO does not provide financial services to the public and therefore does not have an internal AML/CFT control function. - Disclosure: CBO discloses relevant information on AML/CFT supervisory powers, policies, and related legal framework; sometimes provides information on implementation (examples: off-site supervisory framework, good and poor practices, sanctions, training). - Recommendation: leverage the upcoming publication of the mutual evaluation to communicate further information on the implementation process and outcomes achieved from implementing AML/CFT powers and responsibilities. *Source: IMF staff.* ### 44. The Banking Law mentions several functions which the CBO fulfills for the benefit of ### The Banking Law mentions several functions which the CBO fulfills for the benefit of ### Transparency of CBO–Government coordination - The Banking Law mentions several functions which the CBO fulfills for the benefit of the Government and various areas in which CBO must collaborate with the Government. - Gaps identified: - Neither the Banking Law, the CBO website, the Annual Report, nor any other CBO publications disclose: - how this coordination takes place in practice; - what the procedures are; - how CBO is held accountable for what it does on behalf of the Government; - what kind of information is regularly exchanged and on what basis; - what the outcomes are of these forms of coordination. - The policies, terms and conditions, and the procedures relating to these functions are not disclosed. - Recommendation (implied by assessment): - Disclose procedures, accountability arrangements, information-sharing practices, and outcomes of CBO–Government coordination (except where confidentiality is required). ### Management and disclosure of government securities - Current disclosures: - The CBO website states that CBO is the manager of Government Bonds, Treasury Bills, and Government Development Bonds. - Prospectuses of these bonds are disclosed on the CBO website. - Press releases for new issuances of bonds are published through the Oman News Agency and the CBO website. - Results of issuance of these marketable securities are announced via the website, the Monthly Bulletins, and via Reuters, Bloomberg, and emails to banks. - Transparency shortcoming and recommendation: - The report notes: "Transparency will increase if the CBO clearly states that the bonds are the only instruments between the Bank and the Government, and if that is not the case, defines and identifies on its website all other instruments that exist in the interactions with the Government." ### Relationships with other domestic financial agencies - Gaps identified: - The relationship between the CBO and other relevant domestic financial agencies is not defined and disclosed in law, in publications or on its website in a clear and transparent manner. - Missing disclosures include cooperation and (co-) decision-making modalities and arrangements for the formal/informal sharing of information. - Relevant policies, instruments, and outcomes of interactions are not disclosed. - Recommendation: - Enhance transparency by consistently disclosing (except on confidential matters) relationships with other relevant domestic financial agencies, including bilateral agreements and the policies and instruments used in interactions. - Suggestion: include specific links to relevant publications on the CBO website. ### Macroprudential coordination and the JFSC - Current disclosures: - The CBO website, the annual FSR and the Annual Report do not provide information about the CBO's interactions with other domestic financial agencies on macroprudential policy, other than stating its composition. - Gaps and recommendations: - Provide more clarity about: - the composition and responsibilities of the JFSC; - the role of the CBO on the JFSC; - the outcome of the deliberations of the JFSC. - Possible disclosure channels: CBO website, social media, or press conferences. ### International engagement and disclosure - Current practice: - The CBO is proactive and engaged with international counterparts; international cooperation and presence in international forums benefits CBO transparency. - Recommendation: - Disclose CBO international activities and participation achievements to the public. - Use different means beyond press releases; consider a dedicated section of the website focused on international issues. - The Annual Report could include a section on CBO international engagement and related achievements, explaining objectives, purposes, outcomes, and benefits of interactions with international institutions. - International agreements could be disclosed when possible. ### Scope and methodology of the detailed review - Review basis and timing: - "This review is based on the current state of CBO’s transparency practices." - The mission took place during June 30–July 11, 2024, and initiatives implemented after the review date have not been considered. - Assessment approach: - In accordance with the CBT, the review does not assign ratings to the CBO’s adherence to the CBT principles. - The review maps the CBO’s transparency practices across a range of best practices. - Transparency practices were reviewed in the context of: - CBO’s legal mandate and policy context; - the sophistication and complexity of the financial system of Oman; - prevailing general legal framework (including, but not limited to, the existence of rules on freedom of information, confidentiality, and active transparency). - Evidence and consultations: - The review team examined CBO transparency practices and tools, relevant laws and policies, and held extensive meetings with CBO Executive Management and staff, and key stakeholders. - Stakeholder meetings included staff from the Ministry of Finance (MoF), Ministry of Economy, the Ministry of Media, members of the Majlis As-Shura and Majlis Ad-Dawlah, the Oman Economic Association, academics from Sultan Qaboos University, Mala’a, and representatives from the Oman Banking Association. - The CBO provided a comprehensive self-review of the CBT, detailed responses to additional questionnaires, and access to relevant public documents. ### Mission appreciation and authorities’ response - Mission appreciation: - "The mission appreciated the very high quality of cooperation received from the CBO." - The mission extends thanks to the Executive President, Executive Vice Presidents, Senior Management and staff of the CBO. - The mission singled out staff—"most notably, Abdul Aziz, Mariam, Malak, and Raja"—from the International Coordination Department and Research Department. - Authorities’ response highlights: - The Central Bank of Oman (CBO) expressed sincere gratitude to the IMF mission, led by Mr. Khan, for their cooperation and commitment during the Central Bank Transparency Code review conducted at the CBO's request. - The CBO stated the review provided "an invaluable opportunity for self-assessment" and aligns with efforts to modernize legal frameworks, regulations, and policies. - The CBO noted the report acknowledges that "the Central Bank of Oman (CBO) has a strong focus on transparency, building on the Omani Vision 2040" and that "the Central Bank Transparency Code review – the first one in the GCC region – reflects the commitment of the authorities to strengthening the role of the CBO as a critical public institution, with a transparency framework firmly anchored in the law". - The CBO has taken note of the recommendations and is committed to further enhancing transparency in line with global best practices while tailoring them to domestic context and legal framework. *Source: Excerpts from the IMF review of the Central Bank of Oman transparency practices, mission June 30–July 11, 2024.* ### Annex I. Central Bank Transparency Review— ### Annex I. Central Bank Transparency Review— Detailed Review Report for the Central Bank of Oman ### Pillar I — Central Bank Governance: Legal Structure and Disclosure - The CBO official website provides information on relevant legislation, objectives, function, mission statement, historical background, and that an autonomous college (CBFS) has been established under CBO control. - The Annual Report and website disclose names of members of the Board of Governors, the internal organizational structure, and names of CBO Management, but: - Internal governance arrangements, by-laws, Rules of Procedure of decision-making bodies, and detailed legal instruments are not disclosed. - It is difficult to get an overview of all laws, regulations and decisions relevant to the Bank's operations from the website. - Legal framework specifics: - Banking Law 2000 (Royal Decree 114/2000 Central Bank of Oman) is identified as governing CBO. - National Payment Systems Law (NPS Law) (Royal Decree No. 8/2018) provides additional payment and settlement powers. - Bank Deposits Insurance Scheme (BDIS) established by Royal Decree No 9/1995; BDIS regulations issued by Board of Governors, scheme managed by an Administrative Committee; BDIS is dependent on CBO financially and administratively. - Article 3 Banking Law states other laws (Commercial Law, Commercial Companies Law, Law relative to capacity to contract, procedural laws) supplement the Banking Law; Royal Decree No 114/2000 states the Banking law has preference over all other Omani laws. - Article 121 Banking Law: provisions apply to Islamic Banks to the extent not inconsistent with nature of Islamic Banking. - Assessments and gaps: - Overall: legal framework is explained in Banking Law but public disclosure of detailed legal structure is limited. - The CBO does not indicate how stakeholders will be involved in legal framework revisions; not all circulars (in particular those directed to banks) are disclosed. - Legal nature (public vs private, ownership structure) and legal protection are not clearly disclosed; By-laws and Rules of Procedure not published. - Recommendation highlights: - Disclosure of by-laws, Rules of Procedure, fuller compilation of relevant laws/regulations, and clearer explanation of legal nature and legal protection on website and in Annual Report. ### Pillar I — Mandate: Objectives, Functions, Powers - Objectives: - Article 1 Banking Law lists objectives including maintenance of financial stability, maintain domestic and international value of currency, contribute to fiscal and monetary development. - CBO website lists purposes: (i) monetary stability; and (ii) financial stability; also states CBO is the single integrated regulator (noted as a function more than an objective). - Banking Law does not indicate priority or relationship among objectives, nor how objectives are pursued autonomously. - Functions: - Chapter Two of Title Two of the Banking Law: ‘Functions of the Central Bank’ contains 4 articles and powers; supervision function appears in Title Four and Title Six. - NPS Law (Article 2 objective: financial safety and efficiency) sets payment and settlement function; CBO website clarifies responsibilities. - Bank Deposits Insurance Scheme (BDIS) established 1995; Administrative Committee manages operations (not CBO). - Article 30(b) Banking Law allows CBO to carry out any other central bank operations not conflicting with law; unclear whether CBO performs other functions beyond those stated. - CBO website lists functions: Formulating and administering monetary policy; Acting as banker for the Government; Acting as banker for the banks; Issuing national currency and managing liquidity. - Powers: - Powers are provided to the Board of Governors (Article 14), including promulgation and enforcement of rules and regulations; Article 15 contains residual powers; Article 20 allows management and staff contractual powers. - Banking Law contains no provisions on prohibitions. - Assessment: - Objectives list is long and unranked, potentially confusing to public. - Functions and powers are partly clear but some functions are dispersed across Titles; residual powers and extent of other functions unclear. - Recommendation highlights: - Amendments to Banking Law under consideration are expected to improve transparency of mandate; CBO to clarify functions and legal bases on website. ### Pillar I — Autonomy (Institutional/Functional/Personal/Financial) - Institutional/Operational Autonomy (Principle 1.3.1): - Banking Law does not clarify prohibition on seeking/taking instructions from private or public bodies. - Some articles (e.g., Article 14, Article 30(b)) indicate His Majesty the Sultan may refer or delegate matters; ambiguity remains whether such delegation permits attached instructions. - Role of Ministry of Finance representative and Minister of Economy on Board is not clearly defined. - Review: Not Implemented. - Recommendation: Clarify institutional autonomy in law and on website. - Functional Autonomy (Principle 1.3.2): - Article 9: one of seven Governors is a representative of the Ministry of Finance with voting rights. - CBO website indicates Minister of Economy is a Board member, though Article 10(b) stipulates no Governor, except Ministry of Finance representative, shall occupy other government office—creating inconsistency. - Article 42 requires His Majesty the Sultan approval for denomination of currency coins and notes; special issue coins (Article 46) also require approval. - CBO has instrument autonomy in practice (not stated in law), and website discloses how monetary policy objective is achieved (see Principle 2.1 in source). - Review: Not Implemented. - Recommendation: Disclose arrangements with government representatives and clarify goal/instrument autonomy. - Personal Autonomy (Principle 1.3.3): - Articles 8–13 Banking Law specify term of office, appointment and dismissal procedures, eligibility and incompatibility, and grounds for dismissal for Board members; Article 22 limits liability except for fraudulent/willful acts; Article 22 provides defense cost reimbursement unless final judgment finds personal liability. - Rules governing remuneration of Board members not disclosed; CVs/biographies not published. - Review: Expanded (criteria and procedures are clear in law but disclosure incomplete). - Recommendation: Publish remuneration rules, biographies, and explanations of practical implementation. - Financial Autonomy (Principle 1.3.4): - Articles 31–39 Banking Law clarify capital, reserves, provisions, profit distribution, and applicable accounting standards. - Article 26(c) allows temporary advances to Government up to ten percent of the budgeted recurrent revenue of the Government for the relevant fiscal year. - Article 35 provides recapitalization provision; Articles 34 and 37 provide distribution of dividends to Government. - Budget process, Board approval requirements, determination procedures for budget, creation of special reserves, accounting treatment of forex gains/losses not disclosed. - CBO does not publish rules on monetary financing or budget decision procedures on website. - Review: Core (general arrangements clarified in law but transparency on practice and procedures lacking). - Recommendation: Publish Bank’s budget rules, rules on monetary financing, and key elements of financial autonomy on website. ### Pillar I — Decision-Making Arrangement - Legal and institutional basis: - Article 8: management entrusted to Board of Governors with full authority for management/operations and supervision of banking business; Articles 14 and 15 enumerate powers. - Article 16: provisions on Board meetings, power to adopt by-laws, create Executive Committee (three or more members) with delegated powers. - Article 14(p): Board may form committees to consider matters referred or delegated. - Article 21: Executive President appointed by Royal Decree; Board may empower him; responsible for implementing Board policies and executive management. - Published information: - Website discloses names/functions of Board members and CBO Management and a new organization structure. - No CVs/biographies, by-laws, rules of procedure, internal circulars, or detailed allocation of responsibilities published. - Committees (Article 14(p)) and Executive Committees (Article 16(n)) exist but composition, responsibilities, and links to circulars are not disclosed. - Review: Not Implemented. - Recommendation highlights: - Publish by-laws, rules of procedure, committee charters, composition, responsibilities, and links to internal circulars to improve transparency of decision-making. ### Pillar I — Risk Management - Risk Exposure (Principle 1.5.1): - CBO does not disclose principal risks it is exposed to; Annual Report lacks discussion of levels and changes in CBO’s own risk exposure (focuses on financial and payment system risks). - Article 17 requires quarterly publication in official Gazette of financial condition statements (quarterly report published on website) but quarterly reports contain mostly data with minimal explanation. - Annual audited financial statements (including explanatory notes) are not published. - CBO discloses a high-level risk stance for National Payment System (settlement (credit) risk and operational risk). - Articles 14, 28, 32 Banking Law set requirements to limit exposure in external reserves and operations, but CBO does not publish foreign reserve investment policy or limitations. - CBO publishes Financial Stability Report (FSR) and Macroeconomic Stability Report (MSR) but these do not discuss CBO’s own risks. - Review: Not Implemented. - Recommendations: Publish full audited financial statements with notes; publish high-level risk management framework, risk appetite and tolerance; include a section on CBO’s key risks in Annual Report. - Risk Framework (Principle 1.5.2): - CBO has evolved towards Risk Based Supervision and has Macroprudential Oversight Department (MPOD); CBO issued AML Law, Bank Resolution Framework, policies on Financial Inclusion, guidance on Sound Compensation, Correspondent Banking, IFRS 9, and Basel III adoption. - Risk Management & Quality (RMQ) department reports to Executive President and periodically to Audit and Risk Committee (ARC). RMQ has an ERM framework based on ISO, including risk appetite statement, risk tolerances, risk registers, and Business Continuity Plan; framework not published externally. - NPS risk management applies Principles for Financial Market Infrastructure (PFMI); payment systems have hot standby Disaster Recovery Site. - No substantive public disclosure of overall risk strategy, process for identifying risks, or risk governance structure. - Review: Not Implemented. - Recommendations: Publish descriptions of risk management strategy, frameworks, reporting lines, role of Board and ARC, composition and powers of ARC and RMQ, and consider joining IORWG. ### Pillar I — Accountability Framework and Internal Controls - Independently Audited Financial Statements (Principle 1.6.1 / 1.6.2): - Article 38: financial statements “shall be determined according to the generally accepted principles of accounting, including the International Accounting Standards in so far as they do not contradict any provisions of this Law, agreed by the Auditors ... and approved by the Board of Governors”. - Quarterly Statement of Financial Position and Income Statement are published in the Gazette and on CBO website; included in Annual Report. - External Auditor’s report is included in Annual Report but Note 2 (basis of accounting) is not published; full annual audited financial statements are not published in public domain. - Article 18 provides for selection of external auditors though term and qualifications of audit firm not disclosed. - Review: Not Implemented. - Recommendations: Amend Banking Law to require publication of full audited financial statements with accounting policies, require external audit under international standards, and publish auditor selection/term details. - Audit & Risk Committee and Internal Audit: - ARC exists; Internal Audit (IA) reports functionally to ARC and administratively to Governor (not specified in law). - ARC and IA have charters aligned with IIA standards, but charters are not public; IA claims conformance with IIA standards though not publicly stated. - External Quality Assessment of IA conducted every five years (details not published). - Minutes, meeting schedules, charters, and IA’s opinions are not disclosed publicly. - Review: Not Implemented. - Recommendations: Publish ARC and IA Charters, describe IA scope and reporting, disclose ARC membership, meeting schedule, and key activities. - Anti-corruption and Code of Conduct (Principle 1.6.3): - Banking Law includes provisions: Article 9 (qualifications), Article 10 (conflict of interest), Article 12 Protection of Public Funds and Conflict of Interest Avoidance No. 112/2011 (financial declarations), Article 13 (removal for violation), Article 22 (liability and indemnity), Article 24 (confidentiality), Article 75 (duty of care). - CBO does not publish a formal singular Code of Conduct; no whistle-blowing policy currently published (mission understood one is in development). - No formal independent public mechanism for anonymous reporting of conflicts of interest, fraud, or unethical activities. - Review: Core. - Recommendations: Publish relevant anti-corruption legislation links, develop and publish Anti-bribery and Corruption Code of Conduct and Whistle-Blowing policy, and disclose aggregated information on proceedings/actions under anti-corruption laws. - Human Capital Management (Principle 1.6.4): - Organization chart and names of Board members published; no staffing statistics published. - Article 21 establishes framework for appointment, remuneration and benefits; CBO exempt from Government staffing regulations. - Staff Regulation of the Central Bank 2004 is available internally but not public; HR policies treated as confidential. - Educational programs for Omani citizens are published; aggregate annual cost of employee compensation and benefits disclosed in Income Statement. - No explicit policies on diversity, inclusion, or succession planning; employee satisfaction surveys and coaching programs exist. - Review: Not Implemented. - Recommendations: Publish qualitative descriptions of HR policies, aggregated human resource statistics (staff levels, recruitment, retirements), compensation structure by band/category, succession planning, and clarify applicability of Omani Civil Service Law if relevant. ### Pillar I — Communication - Organizational arrangement: - Communications and Media Department (C&MD) is shown in organigram and published on CBO website. - C&MD is responsible for strategizing and executing communication initiatives under guidance of His Highness the Chairman of the Board of Governors; department divided into Media Section and Digital Communication Section. - Disclosure: - The organigram establishes the Communication Department and is published; further operational details and processes for communications not extensively disclosed in source. - Recommendation: - Clarify and publish organizational responsibilities, processes, and channels for communication to stakeholders as part of broader transparency improvements. *Source: Annex I. Central Bank Transparency Review— Detailed Review Report for the Central Bank of Oman* ### Section is tasked with managing traditional media relations and ensuring the ### 1omnea2025003-print-pdf - Section is tasked with managing traditional media relations and ensuring the ### Organizational responsibilities and public disclosure - Communication responsibilities: - Section (traditional media) manages media relations and standardization of messages aligning with government policies. - Digital Communication Section oversees the bank’s digital presence, including website and social media content, reflecting strategic vision and regulatory compliance. - The above description of organizational responsibilities is not disclosed to the public. - Disclosure obligations: - General obligation to report to the public anchored in primary legislation article 17 of the Banking Law. - Reports published on the website: Annual Report, Financial Stability Report, Macro Stability Report, Bulletins, and occasional papers. - The Central Bank of Oman (CBO) explicitly states “Transparency” as one of its institutional values. ### Communication processes, policy, and evaluation - Processes: - All organizational units are actively involved for issues within their competence; final materials approved by strategic managers or by the Governor. - Examples of articulated and disseminated initiatives: Fintech initiatives, financial facilities for specific groups, dissemination of monetary and banking developments. - Policy and guidelines: - There are no published policies, principles or guidelines in the area of communications related to external communication. - There is no evaluation system regarding communications that are disclosed to the public. - Review findings: - Organigram discloses the communication unit but not the institutional communication structure or its tasks and functions. - No established calendar of mandatory reports and board decisions is publicly accessible. - Recommendations: - Disclose a communications policy covering objectives, target audiences, channels, tools, and evaluation methodologies. - Publish institutional communication structure, tasks, functions, and a calendar of mandatory reports and board decisions. - Establish an evaluation system/methodology to measure communication efficacy. ### Communication objectives, tools, events, and website - Objectives and audiences: - The CBO does not disclose its communication objectives or target audiences to the public. - Tools and channels: - Social media presence: Instagram, LinkedIn, X, and YouTube. - Official publications and direct participation in conferences and forums. - Events and educational activities disclosed include: - Workshop on wage protection system with the Ministry of Labor. - Speeches by the CBO Executive President regarding technical dialogues with society. - eKYC platform (use of infographics to simplify technical information). - Omani Youth Day. - Website observations: - Website available in Arabic and English; landing page is clear and easy to use. - Not all CBO tasks are displayed on the welcome page (e.g., communications actions, international cooperation, consumer protection, human resources recruitment). - Tabs on substantive functions could be enhanced with explanations, related data, links to research papers, reports, and better data visualization. - Accessibility issue: legislation, regulations, directives, and guidelines already disclosed to financial institutions are not organized or easily accessible on the website. - Channels for public contact: - Contact points via the CBO website and through its ““X” account”. - Recommendations: - Reinforce and define institutional communication objectives; disclose an institutional communications strategy and target audiences. - Organize publications, workshops, events, press releases, and contact points in an accessible manner, establishing response timeframes. - Use simplified language, videos, infographics, and visual aids for public-facing materials. - Improve website integration with social media and organize legal/regulatory documents clearly. ### Confidentiality and data classification - Legal basis: - Confidentiality set forth in Article (24) of the Banking Law (duty of secrecy) and Article 70 (a) (powers to regulate secrecy of banking information). - AM/LCFT law confidentiality in article 43 and articles 47 and 49 related to disclosure and confidentiality of AML/CFT information. - Civil Service Law, Central Bank Staff Regulation, and Penal Code contain provisions on confidentiality and penalties. - Review findings: - Banking Law provides general provisions; more explanation and disclosure of confidentiality measures and policies would benefit transparency. - Recommendations: - Develop rules, regulations, voluntary policies, or guidelines to implement confidentiality measures according to data nature. - Establish and disclose a policy explaining reasons that trigger confidentiality and the data classification system. ### Monetary policy framework and transparency (Principle 2.1 and related) - Objectives and framework: - Primary goal: ensure the stability of the exchange rate as an essential precondition for economic growth, stable inflation, and financial stability. - Disclosed on the Monetary policy objective section of the CBO’s website. - Key implementation aspects disclosed: - Liquidity management: direct instruments (Open Market Operations, OMO) and indirect instruments (Swaps and rediscounting facility). - Foreign exchange regime: fixed exchange rate regime pegged to the US Dollar. - Operational linkage: CBO anchors monetary policy to the US Federal Reserve; policy (repo) rate set by referencing the upper limit of the US target federal funds rate (TFFR) plus an additional spread of 50 basis points as a risk premium. The repo rate considered the policy rate (see page 69, Annual Report 2022). - Policy decisions and governance: - Board of Governors authorized to establish monetary policy (Article 16); regular meetings at least quarterly (Article 16). - Since 2022, CBO discloses repo rate decisions and provides explanations in the context of monetary policy objectives. - Lacking: details on preparation, governance bodies, and decision-making process. - Supporting analysis and publications: - Publications available: Monthly and Quarterly Statistical Bulletins; Review of Banking and Monetary Development; Macroeconomic Stability Report; Annual Report; Research Papers on CiC modeling, inflation dynamics, labor market, and financial stability. - Recommendations: - Explicitly disclose operational target (repo rate) on website. - Describe internal committee structure and decision-making process for monetary policy. - Provide scenario analysis and a centralized data hub; offer data in Excel/CSV formats. ### Foreign exchange administration and cross-border flows (Principle 2.2–2.3) - Legal and institutional framework: - Banking Law objectives include promoting banking institutions and maintaining financial stability (Article 1(a)); powers include withdrawal of licenses and supervisory powers (Article 14(g), 14(h)). - Specific FX powers: Article 14(l) and 14(m) grant authority to promulgate regulations related to currency control and limitations on foreign currencies held and uncovered FX positions. - Article 31 (Royal Decree 114/2000) and Article 17(a) also referenced for reserves. - Disclosure and strategy: - Legal framework for foreign exchange administration and cross-border flows is disclosed on the website and via AMLTF Law, Consumer Protection Framework, Banking Circulars and Regulations. - Specific strategy regarding foreign exchange administration is not disclosed. - Policy decisions and transparency: - No disclosure of policy decisions to the public on: - Current and capital transactions among residents and nonresidents. - Protective measures for balance of payments threats. - Manners and conditions of fast money transfers. - Review: Not Implemented for policy decisions and supporting analysis. - Recommendations: - Clearly explain legal framework and strategy on the website and in the Annual Report; publish a compendium of legislation and regulations accessible to the public. - Disclose objectives and criteria for new policies and their implementation; request feedback from the business community when appropriate. ### Foreign exchange regime and interventions (Principle 2.3, 3.3) - Regime disclosure: - Fixed peg disclosed; parity set to USD 2.6008 per RO with last change in 1986. - FX management used to manage structural domestic liquidity and maintain the peg. - Operational details: - CBO intervenes in FX market; provides foreign exchange swaps to banks; instruments include Spot, Swaps, Forward and other approved instruments. - The fixed exchange rate regime and open capital account imply automatic transmission of U.S. monetary conditions to Oman. - Recommendations: - Consider publishing FX management decision-making processes regarding the peg. - Publish rules governing modes of operation, FX market convention, and eligibility criteria for counterparties. - Publish market-maker agreement with banks (referenced in IMF’s 2022 AREAER) to enhance transparency. ### Foreign exchange reserves management (Principle 2.4, 3.4) - Objectives and operative models: - Policy objectives disclosed: ensure liquidity, preserve capital, achieve a reasonable return. - Operative models include investments in high-quality, low-risk assets (government securities and bonds); operative models and Investment Guidelines are not disclosed. - Governance and oversight: - Board of Governors oversees FX reserve management; Article 17(a) requires monthly statements to governors and quarterly summaries in the official gazette. - Reserve Asset Management Committee (RAMC) and Investment Committee (IC) directives referenced but not disclosed. - Portfolio segmentation: - FXRAP divided into Liquidity Tranche, Bridge Tranche, and Income Tranche (described broadly). - Instruments: - Instruments used: Money Market transactions, Call/Current accounts, BIS instruments (FXBIS and FRIBIS), Repurchase Agreements, Certificates of Deposits, Foreign Exchange transactions (Spot, Swaps, Forward) as per Investment Guidelines (not disclosed). - Gaps and recommendations: - Investment guidelines, directives, benchmarks, risk constraints, exposure limits, and parameters are not published. - Recommend publishing Investment Guidelines, governance allocation, risk parameters, quarterly reports, and consider a dedicated Report on International Reserves with governance, risk exposure, benchmarks, and reserve adequacy assessment. ### Macroprudential policy, financial stability, and stress testing (Principles 2.5, 3.5, 3.6) - Macroprudential framework: - Financial Stability function formed in 2011; annual Financial Stability Report (FSR) issued since 2013. - Joint Financial Stability Committee (JFSC) formed; chaired by Executive President of CBO; JFSC is advisory and does not issue recommendations or press releases. - Circulars related to macroprudential measures exist, but no cohesive public conceptual framework or strategy is disclosed. - Policy decisions and disclosure: - Macroprudential policy decisions announced via circulars to banks and published in the Official Gazette (e.g., Circular BM 1109/2013). - Decision-making process and rationale for macroprudential actions are not disclosed. - Stress testing and analysis: - FSR discloses stress test design, scenarios (baseline, adverse, adverse hypothetical, reverse), and liquidity stress testing approaches (LCR one-month survival and 6-month stressed cash outflow). - Macro stress test covers nine domestic banks representing more than 95 percent of total assets of the banking sector (FSR 2023, page 54). - Coverage of institutions and stress test methods largely disclosed; some design and implementation details lacking (e.g., bottom-up component). - Recommendations: - Publish a single macroprudential framework document and clarify objectives, instruments, and decision-making processes. - Publish key indicators and quarterly financial soundness indicators; disclose ex-post evaluations of policy actions and methods and data used for stress tests. - Clarify enforcement regime and coordination with other authorities. ### Emergency Liquidity Assistance (ELA) and lender-of-last-resort - Current status: - CBO lacks a formalized ELA framework in law; LoLR role not specified in the Banking Law. - ELA Framework completed and reviewed with MoF but not issued as of July 2024; CBO intends to publish a public version and issue press releases once approved by the Board of Governors. - IMF cooperation: - IMF technical cooperation scheduled to assist the CBO in finalizing its ELA framework and Emergency Readiness, Management, and Response Framework. ### Operational transparency: monetary operations, collateral, counterparties (Principles 3.1, 3.2) - Instruments disclosed: - Range of monetary policy instruments listed on website: Repo/Reverse repo, Discount/Rediscount of Commercial Papers, Certificates of Deposit, Discount of Treasury Bills, Foreign Exchange Swaps, Direct Lending of US Dollars to Local Banks. - Banking Law Articles 14(d), 28, 62, and 63 outline instruments and reserve requirements. - Gaps: - Operational target is not clearly defined and disclosed. - Approved list of eligible securities, pricing and haircut of collateral, terms and reserve requirement details (ratios, remuneration, maintenance period, averaging provision) are not made public. - Eligibility criteria and detailed terms for monetary policy counterparties could be enhanced. - Recommendations: - Publish operational target, eligible collateral list, pricing/haircut policy, and eligibility criteria and terms for counterparties. ### Financial market infrastructures, FX market participants, and limits - Market participants and coverage: - CBO communicates targeted markets and agents; lists of licensed exchange establishments and transaction flows described on website and Annual Report. - CBO regulations permit banks to have foreign exchange exposure up to 40 percent of their Tier 1 capital. - As of December 2016, conventional banking system includes seven local commercial banks and nine foreign banks; two specialized banks; six finance and leasing companies; sixteen money exchange establishments; 36 money changers. Islamic banking: two full-fledged local Islamic Banks and six Islamic Banking Windows (70 dedicated Islamic bank branches). - Recommendations: - Disclose market-maker agreement with banks; publish FX market turnover data and daily data on FX market turnover for enhanced transparency. ### AML/CFT supervision and disclosure (Principles 2.10, 3.11, 4.10) - AML/CFT supervisory role and disclosures: - CBO is AML/CFT supervisory authority for banks, finance leasing companies, money exchange establishments, and payment service providers. - CBO issued circulars and comprehensive guidelines (with Financial Services Authority) to assist financial institutions in understanding obligations under Royal Decree No.30/2016. - Guidance and materials available at: https://cbo.gov.om/Pages/AntiMoneyLaundering.aspx - Internal controls and resources: - CBO does not provide financial services to the public and therefore does not have an internal AML/CFT control function (this pillar considered not applicable). - CBO does not publish sufficient information about human and technical resources allocated to AML/CFT supervision. - Outcomes and enforcement: - CBO publishes general information annually on AML/CFT supervisory activities and occasionally on administrative and financial sanctions; Annual Report lacks sufficient AML/CFT outcomes detail. - Recommendations: - Publish more detailed outcomes of AML/CFT supervisory actions (including, where appropriate, names of supervised institutions and enforcement actions, subject to case-by-case confidentiality). - Disclose resources and organizational structure supporting AML/CFT supervision in annual reports and organizational charts. ### Consumer protection, dispute resolution, and financial education (Principle 2.11, 3.12, 4.11) - Institutional arrangements and frameworks: - Consumer protection anchored in Banking Law (data privacy: Article 70; Freedom of Banking Relationships: Article 71; disclosure requirements: Article 72) and National Payment Systems Law 8/2018 (Article 16). - Customer Service Department (CSD) established to implement the Financial Consumer Protection Regulatory Framework (FCPRF). - FCPRF published on 21 August, 2023 (circulars BM 1184, FM 37, ME 36) covering five core principles: disclosure & transparency; fair treatment and business conduct; data protection & privacy; dispute resolution mechanism; financial education. - Dispute resolution and complaints: - Each bank must have internal dispute resolution and complaint handling systems; reporting mechanism to CBO required. - Customers can submit complaints via the CBO website (customer complaints page) or Customer Service Office (in-person/email/phone). - Quarterly and annual reporting on customer complaints introduced. - Financial education: - CBO runs awareness and education programs (Global Money Week, Tawasul Program) targeting Women, SMEs, Students, Freelancers, and Public on Savings, Importance of financial culture, Responsible borrowing and Management of debt, Rights as a customer, Building financial independence. - CBO conducts workshops on FCPRF at the College of Banking and Financial Studies. - Gaps and recommendations: - FCPRF does not describe CBO’s own dispute resolution mechanism; CSD handles consumer complaints but its role and services should be disclosed on the website. - Disclose Unified Service Catalogue with service descriptions, terms, channels, procedures, timeframes, fees, and required documents. - Publish procedures and timeframes for complaint handling and outcomes of dispute-resolution monitoring and surveys. ### Reserve adequacy, reporting, and financial reporting (Principles 3.4, 4.4) - Reserve adequacy disclosure: - Macroeconomic Stability Report discloses criteria for assessing adequacy and liquidity of FX reserves using benchmarks such as import cover and ratio of FX reserves to M2. - Annual reports contain data on stock of official reserve assets, transactions, foreign exchange and market revaluations. - Quarterly reports to the Council on management and investment of foreign reserves are published. - Gaps in governance and reporting: - Investment Guidelines, Board of Governors' Directives, and RAMC/IC Directives are not published. - No disclosure of Investment Guidelines, benchmarks, risk parameters, market counterparties selection criteria, or audited financial statement details on reserves (amount, composition, profit/loss, and risks). - Recommendations: - Publish a reserve adequacy assessment in the Annual Report; provide risk statements; disclose investment guidelines, benchmarks, and audited reserve details. ### Use and transparency of stress test results and macroprudential outcomes - CBO disclosures: - FSR describes stress test objectives, design, scenarios, and coverage; stress tests aim to assess resilience over one-year horizon. - FSR describes examples where macroprudential measures influenced stability (loan moratorium effects; limits on loan-to-value and debt-burden ratios referenced). - Gaps and recommendations: - Disclose how stress test results inform policy measures and supervisory actions; publish ex-post evaluations of macroprudential policy effectiveness and the data/methods underlying policy evaluations. *Source: 1omnea2025003-print-pdf - Section is tasked with managing traditional media relations and ensuring the (excerpts from the CBO assessment).* ### 1. Periodic Complaint Reports ### 1. Periodic Complaint Reports ### Periodic statistical reports on complaints - CSD is establishing periodic statistical reports regarding the complaints received against any of the licensed financial entity highlighting the most frequent complaints type and against which entity and shared with concerned departments within the CBO. ### Surveys - CSD has developed two surveys, notably the Financial Literacy Survey and the Customer Satisfaction Survey. - Financial Literacy Survey - Purpose: aimed to understand the extent of society’s financial knowledge. - Use of findings: used to prepare the Awareness Campaign Plan for the year 2024. - Campaign content: included short messages to be published in the different CBO’s social media accounts to enhance financial literacy which in turn will positively help in reducing the number of received complaints. - Customer Satisfaction Survey - Purpose: assesses the satisfaction level of consumers against the services provided by the CBO. - Evaluation criteria: focuses on the followed procedures, required documents, time taken, and responsible staff. - Implementation: conducted in cooperation of Ministry of Labor (Ijadaa Initiative). ### Disclosure and reporting - The above-mentioned initiates should be disclosed on the website in an accessible manner and also described in the annual report. *Source: 1. Periodic Complaint Reports* ### 3. Meetings with Executive Management of Financial Entities ### 3. Meetings with Executive Management of Financial Entities ### CSD meetings and complaint management - CSD conducts meetings with executives from licensed institutions to discuss any matters or implications with handling any complain received against them or any areas for improvement that might help in enhancing Complain Management Process. - CSD also shares Statistics Reports about complaints received with concerned departments within the CBO. Review Not Implemented - Comments: - The outcomes of the different efforts to measure and assess actions on consumer protection should be disclosed to the public and to financial institutions in a clear and accessible manner. - The CBO should consider publishing a report on consumer protection and include the topic of consumer protection in its Annual Report. - The CBO could include a link or tab on its website to a page (or a separate website) on consumer protection encompassing clear information regarding regulatory issues, explaining in a clear manner any upcoming regulatory changes, the result of statistical analysis of consumer complaints and queries and links to general or specific reports on financial consumer outcomes. ### Pillar V—Central Bank Official Relations: Overview - Principle 5.1. Government: The central bank discloses its relationship with the government. This includes the exchange of information, the coordination of policies, and financial aspects such as rules on profit distribution, clearly distinguishing the different roles and modalities this can take. ### Principle 5.1.1 — Institutional relationship with government Description: - The institutional relationship of the CBO with the government is laid down in the Banking Law, which is accessible on the CBO website. - Article 1(b) mentions that CBO advises the government of the Sultanate on domestic and international economic affairs. - Article 26 states that CBO is the official bank of the government, which means that it acts as a fiscal agent of the government and enters into financial transactions with third parties on its behalf. - The CBO website mentions services provided to the government: acceptance of deposits from the government, lending to the government to help finance the fiscal deficits, running the government bank account, acting as its fiscal agent, and it helps the government with public debt management, exchange control, and management of the FX reserves of the country. - No further explanation is provided about what its position as an advisor to the government entails, nor details about its function as fiscal agent, nor the information exchange mechanisms that exist. - No disclosure is made of the full content of protocols that regulate cooperation and exchange of information between the CBO and other regulatory agencies and other parts of the government. - The current CBO Board of Governors has two members who are representatives of the government: one representative of the Ministry of Finance (as stipulated in Article 9 Banking Law) and the Minister of Economy (Deputy Chairman). Under the Banking law, both representatives have voting rights in the seven-member Board. Neither the Banking Law nor the CBO website indicate how the government representatives fulfill their functions and what coordinating role they play. - A Joint Financial Stability Committee (JFSC) has been established, chaired by the Executive President of CBO, with the Executive President of the Financial Services Authority as Vice Chair and other senior representatives from relevant governmental entities. The CBO has not disclosed the exact composition of the JFSC, its working methods, the precise topics discussed, or published JFSC minutes. - Article 41 Banking Law stipulates that the exchange rate regime is determined from time to time by His Majesty the Sultan. The Banking Law and the CBO website do not explain how this decision is prepared or what the involvement is of the Ministry of Finance and the CBO, nor how and when this decision is released and communicated. - The CBO does not disclose if there are regular meetings between the Chair of the Board of Governors and/or the Executive President of the CBO with the Minister of Finance or other representatives of the Ministry of Finance. Review Not Implemented - The Banking Law mentions several functions and areas of collaboration with the Government, but neither the Banking Law, the CBO website, the Annual Report, nor any other CBO publications disclose in a clear and transparent manner: - how coordination takes place in practice; - what the procedures are; - how the CBO is held accountable for actions on behalf of the government; - what kind of information is regularly exchanged and on what basis; - what the outcomes are of these forms of coordination. Comments / Suggested transparency measures: - Disclose the relationship with the government, including how coordination takes place (reporting requirements and procedures, terms and conditions). - Disclose the mechanism (e.g., protocols) for the establishment of the terms and conditions with regard to functions it performs on behalf of the government. - Provide more information about daily interactions between the CBO and government bodies via the CBO website (including specific links to publications), flyers, social media, or press releases. ### Principle 5.1.2 — Policies and terms governing financial transactions with the government Description: - Article 26 Banking Law states that CBO is the Banker of the government and acts as a fiscal agent, entering into financial transactions with third parties on its behalf, including issuance and management of Treasury Bills and Government Development Bonds. - The CBO website states CBO has a role in managing the national debt, but no disclosure is made of the specific policies and conditions that apply to this role. - Under Article 26(c) Banking Law, CBO may make advances to the government in respect of temporary shortfalls in recurring revenues up to a certain limit, provided they are fully repaid within 90 days. - CBO does not disclose further explanation and information regarding the policy, conditions, and procedures it applies to the above-mentioned financial transactions with the Government. - Agreements between the CBO and the Ministry of Finance on policies and terms and conditions governing financial transactions and services the Bank provides to the Government are not disclosed. Review Not Implemented - The financial functions are laid down in the Banking Law, but the CBO does not publicly disclose policies, terms and conditions, and procedures relating to these functions. Comments / Suggested transparency measures: - Consider disclosing on its website the details, terms and conditions of the central Bank’s functions with respect to the Government, including the terms and conditions of the Memorandum of Understanding with the Ministry of Finance. - Consider informing the public on a regular basis about its financial interaction with the Government via social media and press releases (beyond issuance of Bonds). ### Principle 5.1.3 — Instruments used in interactions with the government Description: - The CBO website states that CBO is the manager of Treasury Bills and Government Development Bonds. The prospectuses of these bonds are disclosed on the CBO website. - Press releases for new issuances of bonds are published through Oman News Agency and the CBO website. - Other instruments (if any) used in interactions between the CBO and the Government and its agencies are not disclosed in CBO's Annual Report or otherwise. Review Not Implemented - It is not clear whether all instruments used between the CBO and the government or between the CBO and government agencies are made public. The Annual Report does not discuss or disclose the transactions that take place between the CBO and the government. Comments / Suggested transparency measures: - Clearly state if bonds are the only instruments between the Bank and the Government; if not, define and identify all other instruments that exist in interactions with the Government on the website. ### Principle 5.1.4 — Regular disclosure of outcomes of interactions with government Description: - The CBO website regularly mentions tender results of Government Bonds and Treasury Bills issued by CBO on behalf of the government. - It mentions the interest rate on the Repo operations with CBO and the discount rate on the Treasury Bills Discounting Facility with CBO. - Monthly Bulletins published on the CBO website contain the results of issuance of the above-mentioned marketable securities on behalf of the government. - The CBO website provides detailed information about the issuance of Government Development Bonds and their purposes (investment outlet for surplus resources, finance capital expenditure in Five Year Development Plans, and/or finance fiscal deficit). - The results of bond auctions are also disclosed via Reuters, Bloomberg, and emails to banks. - The Annual Report discloses no information on credits and advances to the Government. Review Core - The CBO discloses, on a regular basis, the results of the issuance of marketable securities by CBO on behalf of the government. - It remains unclear whether all instruments used between the CBO and the government (and its agencies) are made public. Comments / Suggested transparency measures: - Provide information on a regular basis about interactions with the government/its agencies beyond issuance of marketable securities via website, social media, or press conferences. ### Principle 5.2 — Relationships with domestic financial agencies Principle 5.2.1 — Institutional relationships with domestic agencies Description: - The Banking Law does not disclose the relationship between CBO and other domestic financial agencies (Article 20 provides legal basis for bilateral agreements with third parties; Article 51 AMLCFT Law likewise). - The Executive President of the Financial Services Authority is a member of the Board of Governors of CBO, but CBO has not disclosed what this Board membership entails in practice or how cooperation and exchange of information takes place. - The CBO has a good working relationship with other agencies, such as the FSA, but the CBO website contains no explanation of CBO’s relationships with domestic financial agencies. Review Not Implemented - The relationship between CBO and other relevant domestic financial agencies is not clearly defined and publicly disclosed, including cooperation and (co-) decision-making modalities and arrangements for formal/informal sharing of information. Comments / Suggested transparency measures: - Clarify the role of the Executive President of the FSA as member of the Board of Governors, including how information is exchanged. - Enhance transparency through more consistent disclosure and detailed explanations of bilateral agreements with public agencies in reports, on the CBO website, or via social media. Principle 5.2.2 — Policies, instruments, and outcomes of interaction with domestic agencies Description: - It is not clear from legal framework, the CBO website and the annual report which policies and instruments are used in interactions with other domestic financial agencies, nor whether CBO releases information about these interactions and their outcome. Review Not Implemented - The policies and instruments used in interactions with other domestic financial institutions and the outcome of the interactions are not disclosed. Comments / Suggested transparency measures: - Clarify publicly what kind of policies and instruments are used in interaction with other domestic financial agencies in reports, on the CBO website, or otherwise. - Consider holding press conferences or providing information via social media about the outcome of such interactions. Principle 5.2.3 — Macroprudential policy disclosure Description: - The CBO website mentions that CBO formed an independent Financial Stability function in 2011 and that it is a member of the JFSC. Review Not Implemented - The CBO website, the annual FSR and the Annual Report do not provide information about the CBO's interactions with other domestic financial agencies on macroprudential policy, other than stating its composition in the Circular BM 1160/2019 on the Bank Resolution Framework for Oman and providing a brief explanation of the JFSC on the CBO website. Comments: - See the comments under principle 5.2.4. Principle 5.2.4 — Financial stability arrangements and disclosure Description: - Within the JFSC, the CBO collaborates with the FSA and other government agencies in the field of financial stability. The CBO Executive Chairman chairs this committee. - It is not clear what the role, responsibilities and actions of the CBO are with regard to this committee. - Procedures for collaboration and the type of information shared are unclear. - Neither the CBO website nor the annual report clarify these matters. No press releases are provided about the outcome of the deliberations in the JFSC. - No information is made public regarding the provision of ELA to banks. Review Not Implemented - The CBO does not disclose its role, responsibilities and cooperation mechanism with regard to the JFSC and the outcome of its deliberations. - Procedures, and terms and conditions on providing liquidity support (in particular ELA) to banks have not been made public. Comments / Suggested transparency measures: - Provide clarity about composition and responsibilities of the JFSC, the role of the CBO in it, and about the outcome of the deliberations via the CBO website, social media, or press conferences. ### Principle 5.3 — Relations with foreign agencies and international organizations Principle 5.3.1 — Exchange of information and coordination with foreign counterparts Description: - Banking Law Article 14 (t) empowers CBO “To represent the Government of the Sultanate, when so designated by His Majesty the Sultan, in international financial and monetary agencies in which the Sultanate shall participate and to appoint representatives, committees or to otherwise participate in the activities, proceedings and negotiations of other central Bank or international financial and monetary agencies.” - Article 17 (b) (2) states under the Annual Report there should be "A detailed statement of the status of any international organization and funds in which the Sultanate has become a member.” There is a responsibility to report (disclose) the cost of membership in international organizations. - Article 27 (b) allows the Central Bank to open and maintain accounts with international financial or monetary agencies and with central banks of other countries. - The Banking law and the AML law (Articles 51) describe cooperation with foreign institutions, including other central banks. - Such a framework empowers the CBO to cooperate with foreign counterparties through protocols and other arrangements for cooperation and exchange of information. Review Expanded - The Banking Law contains clear provisions describing cooperation with foreign institutions, including other central banks. These interactions are disclosed in annual reports. Since the agreements with foreign entities are not disclosed the range of practice is Core. Comments / Suggested transparency measures: - The CBO’s website should have a section regarding its international interaction; cooperation, international organizations membership, dissemination of actions in regional and international forums and bilateral agreements with other central banks. - Disclose and publish agreements when possible and in accordance with counterparts. Principle 5.3.2 — Policies, terms, and conditions for international interaction Description: - Signing of Memorandums of Understanding (MoU) with domestic and international organizations are normally included in CBO’s Annual Report and published as brief press release on CBO’s website and social media platforms (LinkedIn, Twitter, Instagram). - Published briefs include objectives of MoUs and scope of collaboration. Example: MoU with the Central Bank of Iran — abstract discloses aims to strengthen bilateral relations, enhance mutual cooperation, support and develop banking, financial and economic operations, exchange knowledge and expertise, promote bilateral and international trade, exchange visits among high officials, implement secondment programs, and enhance training via institutions such as the College of Banking and Financial Studies in the Sultanate of Oman. - Additional examples: MoUs with the Qatar Financial Center Regulatory Authority and with the Palestine Monetary Authority. - Regional participation: CBO is member of the Committee of Central Bank Governors of the Gulf Cooperation Council (GCC), and as Chair of the Group held the Official Council Meeting in 2023 in Salala, Oman. Review Expanded - Comments: Disclosure of memberships to international organizations, like a listing, would be a good transparency measure. Principle 5.3.3 — Instruments used in international interactions Description: - - Review Not Implemented - Comments: To enhance transparency, explain in the annual report financial transactions with international institutions, foreign governments or other central banks, and disclose such transactions in the financial statements. Principle 5.3.4 — Regular disclosure of outcomes of international relationships Description: - The CBO discloses in its Annual Report collaboration with domestic and international organizations. Some are named (IMF, Financial Action Task Force (FATF), International Standards on Auditing (ISAs)), others are mentioned generally with focus on collaboration areas (e.g., international educational partner working on professional program specialized in Fintech). - Annual report contains country-specific data such as Net International Investment Position (IIP), foreign assets and liabilities, foreign exchange reserves, IMF reserve assets and foreign trade data. - No specific sections in the annual report are dedicated to CBO’s international cooperation updates. - High-level meetings with international organizations or interactions with foreign agencies are normally published through domestic news platforms, the CBO’s website and social media platforms (LinkedIn, Twitter, Instagram). - CBO discloses regular reports in collaboration with regional and international organizations such as Secretariat General of the Gulf Cooperation Council (GCC), Arab Monetary Fund (AMF), IMF, Islamic Financial Services Board (IFSB), etc. Review Expanded - The CBO is an active international player; achievements of participation should be disclosed in annual reports. - The CBO does not publish international agreements or cooperation MoU. Comments / Suggested transparency measures: - Have a dedicated section of international cooperation interactions within the annual reports. - Disclose and publish agreements when possible and in accordance with counterparts. ### Principle 5.4 — Relations with private or semi-public institutions Principle 5.4.1 — Disclosure of investments, ownership of subsidiaries and joint ventures Description: - Review Not applicable Comments: - *Source: 3. Meetings with Executive Management of Financial Entities — 1omnea2025003-print-pdf* --- _Source: https://www.imf.org/-/media/files/publications/cr/2025/english/1omnea2025003-print-pdf.pdf_