By Peter OBIORA InvestAdvocate

Lagos (INVESTADVOCATE)-In its bid to boost Islamic finance in the Gulf region, the Oman central bank on Wednesday said it has set up a central sharia board to help supervise the Islamic banking industry in that region, according to a Reuters report.

This is the same approach adopted by regulators in Nigeria, Malaysia, Pakistan and Morocco.  The centralised model is increasingly being adopted across the global industry but remains a rarity in the region.

According to the report, Oman’s central bank has   appointed five (5) members to its sharia board, which will have direct oversight of Islamic banking institutions.

Sharia boards are groups of scholars who rule on whether financial instruments and activities follow religious principles, such as bans on interest payments and pure monetary speculation.

The report affirmed that Oman was the last nation in the six-member Gulf Cooperation Council to introduce Islamic finance, publishing rules for it in 2012. ‘’The introduction of a central sharia board could now speed up product development, limit costs for Islamic banks and facilitate issues of sukuk (Islamic bonds),’’ the report said.

Similarly, the United Arab Emirates (UAE) has said it plans to follow the centralised approach, backing this up with specific legislation, which could help reduce the risk of conflicting rulings from the sharia boards of various Islamic banks.

Oman said it has established two (2) full-fledged Islamic banks, Bank Nizwa and al izz Islamic, as well as several Islamic windows operated by conventional banks.

The gulf country plans to issue a 200 million rials ($519.5 million) worth of sovereign sukuk early 2015, chief executive officer of Bank Nizwa disclosed to Reuters in September.

Similarly, the Islamic unit of Bank Muscat, Oman’s largest lender, plans a dual-currency sukuk deal worth around $300 million as part of a 500 million rial sukuk programme which the bank’s shareholders approved in March.