Oman has enacted a comprehensive new Banking Law through Royal Decree No. 2/2025, which took effect in January 2025 and formally repeals the banking legislation that had governed the sector since 2000. The new law increases the penalty regime for regulatory breaches, broadens the supervisory authority of the Central Bank of Oman across a wider range of financial entities, and introduces updated provisions addressing consumer protection, capital requirements, and the governance of institutions operating in the Sultanate.
ENHANCED PENALTIES AND ENFORCEMENT POWERS
Under Royal Decree No. 2/2025, banks found in violation of the law face fines of up to OMR 200,000, equivalent to approximately $519,478. Other financial institutions subject to the law face penalties of up to OMR 50,000, or around $129,869. The new law also introduces daily fines of between OMR 1,000 and OMR 5,000 for the unauthorised use of banking-related terms or designations. Conducting unlicensed banking activity carries a custodial sentence of up to three years under the new framework.
The CBO's regulatory scope has been extended to encompass a broader range of financial entities. The new legislation also strengthens consumer protection requirements, placing greater explicit obligations on licensed banks regarding product disclosure, pricing transparency, and the fair treatment of retail customers.
DIGITAL BANK FRAMEWORK
The new Banking Law also formally recognises digital banks, defined as banks that operate exclusively through digital platforms, and empowers the Central Bank of Oman to issue regulations on their licensing, capital, cybersecurity and consumer protection.
Separately, Royal Decree No. 3/2025 granted the CBO legal, financial and administrative independence. Prospective digital bank applicants now have a statutory basis for licensing, with detailed CBO regulations to follow.