The Central Bank of Oman (CBO) has established a new sharia supervisory board in a bid to expand its presence in the Islamic banking industry.

The launch of a central sharia board is aimed at accelerating product development, reduce costs for Islamic banks and facilitate issues of sukuk (Islamic bonds).

Recently, CBO has also appointed five members out of total seven candidates for the high sharia Supervisory Authority and also gave approval to nominate a secretary for the authority, according to Reuters.

The selected board members will have direct oversight of Islamic banking institutions and will rule on activities such as bans on interest payments and pure monetary speculation.

Meantime, UAE has also unveiled plans to follow the centralized approach with the support of a specific legislation, which could reduce the risk of conflicting rulings from the sharia boards of various Islamic banks.

However, most of the Gulf countries perform self-regulation of Islamic financial institutions by setting up sharia boards in each commercial bank to determine permissible products.