Friday 04 / April / 2025
Muscat: Oman will now have a body that will be in charge of rating individual credit history, according to a new Royal Decree.
This means that all information related to a person or company’s loans, delays and defaults will be in one place. Financial institutions would then use this information to check and make decisions related to their clients.
Royal Decree No. 38/2019 established Oman Credit and Financial Information bureau and promulgated its bylaws.
The full-fledged independent credit and financial information bureau called Oman Credit Bureau is affiliated to the Central Bank of Oman.
According to the decree, the objectives of the centre is to establish a central database of credit and financial information at the national level, which will provide data to its members for them to make credit decisions related to their clients which will include whether or not the client has defaulted on a loan.
The centre will collect any information and data relating to the financial obligations of any customer, including information on names, addresses, identity and data relating to all its debts.
As well as the information of any judicial decisions issued against the customer such as entitlements of the government authorities from taxes, fees, royalties and fines, in addition to any other claims.
The centre will also record data related to the customer’s deposits, assets and all sources of income, including salaries, employment or pension information, and information relating to his or her contributions to commercial institutions or companies.
The decree also stipulates that all financial institutions in the country must be members of the centre, “Membership in the centre shall be mandatory for banks, licensed financial institutions, in addition to companies and individuals engaged in financing activities.”
A financial analyst spoke to Times of Oman regarding the positive implications such centre would have on the financial sector, “The main work of the credit and financial bureau is to assess the creditworthiness of customers, thus the stronger credit worthy of a company the more it signifies in terms of its ability to pay off its debts when they fall due.”
“Having a credit and information bureau being established you do what is known as KYC which is Know Your Client check, where you basically try to assess whether the company is creditworthy, whether the financial institution will be able to lend money to the bank. From a financial perspective, it is very important because we do a lot of ratio analysis, and we look at the debt service coverage ratio where we find out whether the company to whom we are lending money will be to pay off its debts and does not go bankrupt in the end,” the financial expert added.
“The current economic condition is such that many companies are not their debts and they go bankrupt and employees get layoff. Therefore such a centre will help so that you can weed out those company which are not able to pay out their debts when they fall due,” the expert added.
