Dedicated unit to handle complaints against banks

KEY MEASURES: The Central Bank of Oman outlines steps for enhancing financial inclusion in the Sultanate

The Central Bank of Oman (CBO) says it is working towards establishing a dedicated unit to handle customer grievances against banking and financial institutions.

The move is part of an array of measures and initiatives adopted by the banking sector regulator with the aim of promoting “financial inclusion” across the banking and financial services industry in the Sultanate.

“Protecting customers of financial institutions remains at the forefront at CBO,” said the apex bank in its newly published ‘Financial Stability Report 2018’. “(To this end), progress is ongoing to establish a new unit that will act as a single point of contact for receipt and resolution of complaints and inquiries from the public,” the Central Bank stated.

The initiative will come as good news for harried banking customers, particularly those who fall victim to hacking, phishing, ATM and credit card fraud and other types of financial crime that occur outside of Oman’s geographical boundaries. Getting redress or compensation for unauthorised withdrawals occurring overseas has proved to be problematic for many victims of fraud in particular.

Additionally, the Central Bank has affirmed its commitment towards “enhancing customer awareness” with regard to the rights and obligations of customers and the general public while dealing with financial institutions.

An advocate of financial inclusion, the CBO says it is part of a global effort to ensure that individuals, households and businesses – regardless of their income levels – have access to, and can effectively leverage the financial system to improve the quality of their lives.

Easy access to the financial system, the regulator explains, enables essential day-to-day transactions, safeguards savings, builds working capital, and improves the overall welfare of the general population.

“It is a constructive route in the way of financing startups or small businesses and can help owners invest in assets that grow their businesses. Financial Inclusion is a notion that has, therefore, become a priority for policymakers and regulators globally,” the Central Bank stressed in its Financial Stability Report.

For its part, the CBO says it wants to make sure that banking products and services are not only made available to all individuals and businesses, but also delivered in a “responsible and sustainable” manner. “The CBO recognises that the benefits of financial inclusion extend beyond individuals and are linked to Oman’s economic and social development and, therefore, it also plays a vital role in achieving financial stability,” it stated.

In line with this vision, the apex bank has been promoting the geographical distribution of banking services to cover all parts of the Sultanate. To encourage banks to open branches in remote locations – Musandam, for example – the institutions have been exempted from paying licensing fees and customary annual fees payable by banks for establishing a presence in other areas.

Further, with a view to sustaining customer confidence in the banking system, the CBO has made its mandatory for all licensed banks to be part of the Deposit Insurance Scheme. Depositors are eligible for compensation of up to RO 20,000 per customer per institution.

Additionally, with the goal of securing the interests of salaried employees, the CBO has strengthened the Wages Protection System to enable the roll-out of a consolidated workers’ pay transfer scheme. This revamped system enables the Ministry of Manpower to create databases that document the details of wages payments in the public sector to ensure timely payments.

Other initiatives designed to promote financial inclusion in the Sultanate include: the establishment of Islamic banks and Islamic windows by conventional banks; enactment of guidelines requiring all banks to allocate a minimum of five per cent of their loan portfolio to finance SMES; introduction of a robust Credit Information System; and the launch last year of a mobile payment clearing system (Mpclear) designed to offer interoperability and unified switching and clearing services between various mobile banking systems.

Additionally, banks have been instructed to make the requisite arrangements for serving ‘Special Needs Customers’ at their facilities.