Bankers caution against ‘excessive consumerism’
More efforts are required to promote the culture of saving
MUSCAT: Banks in Oman believe that ease of access to financing and a wider range of options have enhanced the experience of customers but also hold the opinion that excessive consumerism should be avoided through educating the society.
Yousuf Al Rawahi, deputy general manager - head of branches, retail and private banking at Ahlibank, says that with the ease of available credit, any society will have consumerism, which has to be managed accordingly.
“Lower pricing for customers, faster approvals, attractive schemes etc have had a positive impact. However, this has been well controlled by the regulator by putting caps on debt burden ratio, tenors, bank credit policies etc, which will have a favourable impact,” said Al Rawahi.
However, he says more efforts are required to promote the culture of saving in Oman.
“This can be possible through attractive deposit savings schemes, insurance linked savings plans for education, marriage etc. Consumers should be encouraged to apply for such schemes in order to secure their own as well as their family’s future,” said the official at Ahlibank.
Salim Al Kalbani, acting head of retail products, business and segments department at Bank Dhofar, says that customers should know what their requirements are.
“Many people around the world live on credit and they suffer the consequences. Customers in Oman are generally more aware of their needs and financial requirements, and hence they are less likely to indulge themselves in more than what they really need,” he said.
“Also, the banking rules and regulations in Oman are balancing the credit for each customer by putting a limit based on the salary and other requirements, so customers can still enjoy at least 50 per cent of their salary after deducting instalments,” Al Kalbani noted.
Exponential growth
Asad Batla, head of consumer banking at Bank Nizwa, Oman’s first Islamic bank, believes that the rate of consumption in Oman has witnessed ‘exponential’ growth, especially with the increase in per capita income.
“The dominant trend is for consumers to borrow money to cover their purchases and consequently focus less on savings. Therefore, the lack of saving culture will lead to excessive consumption and ultimately the inability to manage fu- ture plans or emergencies,” he said.
Batla added that Bank Nizwa encourages its customers to have discipline in their financial decisions, while constantly focusing on helping them lead financiallysecure lifestyles.
Save, invest for their future
“Islamic finance being asset backed, and Bank Nizwa being complaint with Sharia laws, we encourage customers to finance goods that they need rather than splurge on cash.
“In case of conventional banking, most of the overburdened customers are those who have taken out cash loans and have spent on unnecessary luxury and non-tangible items,” he said.
“At Bank Nizwa, we have a suite of savings products to encourage customers to save and invest for their future. This way their investments build up, while they get returns on their Sharia-compliant investments. We take our social responsibility and Islamic financial values very seriously,” the official added.