Critical elements in the process of institutional change, even profound change, frequently occur without warning or preparatory fanfare. That has been true with regard to the implementation of Islamic banking in the Sultanate of Oman, as illustrated by the issuance by His Majesty Sultan Qaboos bin Said, on 22nd Muharram 1434 A.H. (6 December 2012 A.D.), of Royal Decree 69/2012, Amending Some Provisions of the Banking Law promulgated by Royal Decree 114/2000 (the “Islamic Banking Decree”). In addition, the Central Bank of Oman (the “CBO”) issued Circular IB 1 on 18 December 2012, which adopted the relevant Islamic banking regulations (the “Islamic Banking Framework”) with only minor amendments to the previously circulated draft. The long-anticipated Royal Decree consists of only three sentences. The amendments to the Banking Law (the “Islamic Banking Law”) are comprised of only 12 sentences set forth in six Articles in one new chapter of the Banking Law (Chapter Six, entitled, quite simply, “Islamic Banking”). The Islamic Banking Framework runs to 589 pages, plus some amendments in Circular IB 1. It is anticipated, however, that the changes effected by the Royal Decree will be significant as the Sultanate embarks upon the age of Islamic banking, finance and investment.

Critical elements in the process of institutional change, even profound change, frequently occur without warning or preparatory fanfare. That has been true with regard to the implementation of Islamic banking in the Sultanate of Oman, as illustrated by the issuance by His Majesty Sultan Qaboos bin S...