The Central Bank of Oman issued a circular on 14 October 2024 requiring every licensed bank operating in the sultanate to develop and submit implementation plans for sustainable and green finance, setting a deadline of 30 June 2025 for submission of those plans.
The circular applies to all locally incorporated conventional banks, Islamic banks, specialised banks, and branches of foreign banks operating in Oman.
CLIMATE RISK ASSESSMENT AT THE CORE
Under the circular, banks are required to assess both physical and transition climate-related risks within their portfolios.
Each institution must produce an implementation plan that sets out specific timelines and milestones for embedding sustainable finance practices across its operations. The plan must be approved at board level before submission to the CBO. The June 2025 deadline gives banks approximately eight months to complete their climate risk assessments, formulate implementation strategies, and secure board sign-off.
Beyond risk management, the circular encourages banks to actively participate in sustainable finance by issuing sustainable or green finance instruments, investing in sustainable assets and offering green loans.
REGIONAL CONTEXT
Regulators elsewhere in the Gulf, including the Central Bank of the UAE, have introduced comparable climate-risk principles for banks in recent years.