Development of Oman’s largest non–oil sectors: financial system of the Sultanate

Abstract

The Sultanate of Oman is a Middle Eastern country whose treasury revenues directly depend on hydrocarbon revenues. However, like many of its neighbors, Oman is also seeking to diversify its economy by expanding the non– oil sectors in industry and economy.The financial system and the banking sector, which is inseparable from it, are by far the largest non–oil areas in the country’s economy. Both traditional and Islamic financial institutions operate in Oman, with very good development potential.Oman is bringing its banking regulatory framework up to world standards. However, the strong concentration of almost all banking assets in three banks makes the financial system more vulnerable to new challenges.