Comprehensive Report: Central Bank Credit Bureau Examination

This report provides a detailed examination of the Central Bank Credit Bureau Examination Department (CBED), outlining its purpose, structure, and operational domains. The report covers key aspects such as planning and monitoring, on-site examination, quality assurance, and risk management, including fraud detection and business continuity planning. It delves into the CBED's role in ensuring financial stability and consumer protection within Oman's banking sector, including licensing requirements, on-site and off-site supervision, and dispute resolution mechanisms. The report analyzes the department's responsibilities, job descriptions, and adherence to the banking law of Oman, providing a comprehensive overview of the CBED's functions and activities. It also includes details on the code of ethics, training, and reporting procedures, reflecting a commitment to transparency and regulatory compliance. This report is a valuable resource for understanding the CBED's role in the financial landscape.

Running Header: CENTRAL BANK CREDIT BUREAU EXAMINATION 1
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Central
Bank
Credit
Bureau
Examinatio
n
Departmen
t

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Table of Contents
1 General...........................................................................................................................................4
1.01 Purpose.....................................................................................................................................4
1.02 List of Abbreviations............................................................................................................4
1.03 Responsibility for Implementation..................................................................................4
1.04 Custody and Access.............................................................................................................5
1.05 Maintenance and Updating................................................................................................5
1.06 Mission Statement................................................................................................................5
1.07 Introduction of Credit Bureau Examination Department......................................11
1.08 Organization structure......................................................................................................12
1.09 Terms of references...........................................................................................................12
1.10 Job Description.....................................................................................................................13
1.11 Retention Period of Files and Records.........................................................................13
1.12 Acting Responsibility..........................................................................................................13
1.13 Code of Ethics and Professional Standard..................................................................13
1.14 Maintenance of CBED Corresponding..........................................................................15
2 Planning and Monitoring Domain..................................................................................15
2.01 Preparation of Annual Examination Plan.....................................................................15
2.02 Risk Profiling and Examination Strategy.....................................................................15
2.03 Monitoring of other Regulatory Data/ Information..................................................16
2.04 Monitoring of Compliance Status of Examination Report.....................................16
2.05 Finalizing TORs of Limited Scope Examinations.......................................................16
2.06 Acting as Nodal Point for Incoming/ Outgoing Mail...................................................17
2.07 Other Policy Related Matters..........................................................................................17
2.08 Strategic Planning and Budgeting.................................................................................17
2.09 Submission of Quarterly Activity Reports to the Board of Governors..............18
2.10 Training and Development..............................................................................................18
2.11 Serve as Secretariat of DMC...........................................................................................19
3 On-site Examination Domain............................................................................................19
3.01 Pre-Examination Activities...............................................................................................19
3.02 Fieldwork Related Activities............................................................................................20
3.03 Drafting and Finalization of Report...............................................................................20
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4 Quality Assurance Domain................................................................................................20
4.01 Review of Draft Violations & Exceptions and Schedule of Criticized Advances
20
4.02 Exit Meeting..........................................................................................................................21
4.03 Review of Exit Meeting Chart..........................................................................................21
4.04 Review of Examination Report.......................................................................................22
4.05 Review of Other Related Documents...........................................................................22
4.06 Secretarial Support to the Rating Panel......................................................................23
4.07 Maintenance of Risk Register.........................................................................................23
4.08 Secretarial Support to MPBDC........................................................................................23
5 Risk Management, Fraud Detection and Business Continuity Plan..........24
5.01 Risk Management...............................................................................................................24
5.02 Fraud Detection...................................................................................................................24
5.03 Business Continuity Plan..................................................................................................25
6 Appendix 1: Changes to the report..............................................................................26
7 Appendix 2: Interruptions.................................................................................................27
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Running Header: CENTRAL BANK CREDIT BUREAU EXAMINATION 4
1 General
1.01Purpose
The fundamental purpose of a credit bureau department is to make sure that the creditors
have the appropriate information to facilitate lending and its related decisions. The department
partners with all institutions which take part in lending including banks, mortgage lenders, credit
card service providers and any other company that deals with financial matters.
1.02List of Abbreviations
i. ACRI- Arab Credit Reporting Initiative
ii. ATM- Automated Teller Machine
iii. CBD- Credit Bureau Department
iv. CBO- Central Bank of Oman
v. MFI- Micro Finance Institutions
vi. MOI- Ministry of Interior
vii. NBCI – National Bureau of Commercial Information
viii. ND- National Identification
ix. ROP- Royal Oman Police
x. SME- Small and Medium Enterprises
xi. WB- World Bank (Monnet, 2016)
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1.03Responsibility for Implementation
Central Bank of Oman (CBO) has a duty and a responsibility of making sure that a constant
structure for the financial progress of Oman has been provided through its Credit Bureau
Department (Dogru, 2017). This will be done in conjunction with any other department which
will be deemed appropriate depending on what has to be done at a given time.
1.04Custody and Access
The custody of information contained herewith and any other related information will be
maintained by the CBO under the department of the Credit Bureau Department. This information
can be accessed by any staff at CBO and any other person who has been granted permission to
access this information by CBO administration.
1.05Maintenance and Updating
This information will be maintained by the CBD at CBO and it will be updated by the same
department in consultation with appropriate government agencies, experts and representatives of
financial institutions where their presence is necessary. This will also be done by the government
through the right ministry so that CBO remains compliant to the law of the state (Wiseman et al,
2019).
1.06Mission Statement
To deliver a constant structure for the financial progress of Oman through efficient,
transparent and effective implementation of financial conversation rate policy and supervision of
the monetary sector.
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Running Header: CENTRAL BANK CREDIT BUREAU EXAMINATION 6
Supervision Framework
The Central Bank of Oman makes use of both on-site and off-site examination
techniques. All banks have to go through an on-site examination every year which is carried out
after a certain period to establish the condition of the institution in question.
Licensing:
1. Requirements
For an organization to be licensed to operate it has to meet the requirements so that its
operations can run smoothly. This means that from documentation, structural requirements,
financial qualifications and personnel should be met depending on the size and scope of the
organization in question. The larger the organization, the more it has to do and vice versa.
2. Ownership
The ownership of a given organization must be stated clearly with the right supporting
documents. Whether it is owned as a sole proprietorship, a partnership or a corporation, this has
to come out clearly so that when licensing is done, the right license has to be provided. This will
enable the government to know who they are dealing with.
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Licensing On-Site
Supervision
Off-Site
Supervision
Dispute
Resolution

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3. Management
For a bank to operate effectively then there is a need for it to have the right people in the
management. This is treated as a requirement before the bank is licensed. An organization,
therefore, must prove that it has the people with the right capacity to manage and run it
appropriately before it is licensed (Brown, 2017). The management is the heart of the organization
and its effectiveness will affect the effectiveness of the entire organization.
4. Financial Capacity
For any organization to receive a license that permits it to operate as a bank in Oman it has to
prove that it has financial stability. As a bank, the core business circumnavigates around money
without which the bank loses its importance (Agarwal et al, 2017). This makes it necessary for a
bank that is seeking a license to operate to prove that it is financially stable and it can meet all
the financial obligations which come before it.
On-site Supervision:
In conformation to the statutes, every organization goes through on-site supervision once per
year to establish its condition on various aspects that are deemed necessary at the time of
examination.
1. Consumer Protection
A report has to generate on whether the organization through its actions and non-actions are
fostering high levels of consumer protection. Instances of unwarranted customer exploitation are
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checked out if they do exist (Li, 2016). Abidance to the laws on customer protection is also
checked out to ensure that all customers are getting what is stipulated by the law.
2. Information security CIA
Measures that have been taken by the organization to protect customer and employee
information which is private are checked out. This aims at ensuring that at no instance does
information which should have remained private and confidential get leaked. Information on
what the organization has done to collect this data so that the general security issues of
information is collected.
3. Compliance
Data on compliance by an organization is collected. When it comes to compliance, the main
area of focus is compliance by law especially when it comes to the setting up and organization of
the premise. This information is collected to determine whether the organization has done as it
should do in terms of providing an environment from which people can work (Ball, 2018). This
will also aim at fostering compliance with the law and other key rules and regulations.
4. Workplace safety
When carrying out the on-site supervision, information on workplace safety of a given place
is collected. This will help in determining whether the premises of a given organization are safe
for the workers and customers. This is done with a close reference to the outlined workplace
safety standards which an organization should adhere to. This is aimed at ensuring that the
workers, customers and other people who visit such a premise are safe.
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Offsite Supervision:
The banking surveillance department is responsible for Offsite supervision.
1. Statistical Returns
Information on the prudential returns for the banks is collected during the exercise. This is
used to measure the financial health of the organization being supervised. This makes it possible
for ongoing supervision of these organizations (Gama et al, 2017). This information also reveals
warning signs that a certain organization is not on the right track for appropriate corrective
measures.
2. Compliance Returns
Data about compliance that an organization has done in comparison to what it should be
doing is collected. This becomes crucial is determining to what extent such organizations are
abiding by the law. This is done so that appropriate corrective measures can be taken to ensure
that all organizations under the supervision of the central bank are complying with the law.
Compliance with working conditions, health and safety environment is also determined (Roberts,
2016).
3. Laws
Apart from the national and international laws which an organization is expected to comply
with, other self-established laws that guide the operation of a given organization are also taken
into consideration. The appropriateness of these laws and general compliance to the general rule
of law is determined through collected data to allow the supervising bank to take the right steps
towards getting things done in the right manner (Kelchen, 2016).
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Running Header: CENTRAL BANK CREDIT BUREAU EXAMINATION 10
Dispute Resolution
Information on the process followed to resolve conflicts whenever they arise is collected and
measured against the national standards. The collected information is aimed at establishing
whether the organization has a dispute resolution plan in place which is operational.
i. Dispute resolution plan
The information that is collected to determine whether the organization has a dispute
resolution plan with a keen focus on the contents of the dispute resolution plan. This aims at
establishing whether the plan meets the required standards (Mungiria, 2019).
ii. Complaint procedure
Data that is collected aims at establishing whether an organization has a well-established
process through which complaints can be launched and a dispute resolved as per the
requirements. The aspect of whether this procedure is well known by the employees or it is not
well known so that it can be applied by the employees (Dressel, 2018).
iii. Complains committee
A committee that receives the complaints and addresses them as per the requirements.
Question of whether the membership on such a committee has an appropriate representation and
they are functioning appropriately (Bogart, 2017).
iv. Uniformity in the complaints handling
There is a need for the organization to make sure that when handling complaints and solving
disputes there is some sort of uniformity so that all people are treated equally (Silvestre, 2017).
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This makes them feel that they are highly valued and therefore they will end up delivering their
best because of the respect and equality accorded to them whether they are complaining or they
are being complained about.
1.07Introduction of Credit Bureau Examination
Department
Credit Bureau Examination Department is a department under the Central Bank of which
takes part in the examination and ensures that the right standards have been adhered to. It was
established under the guidance of the banking law of Oman (Ott, 2018). This department makes
sure that the banks, mortgage companies and all forms of organizations which offer credit
facilities have provided such facilities as it should be (Ling-Yun et al, 2016). The department also
makes sure that the clients are aware of the existence of such service providers so that they can
make the right decisions.
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1.08Organization structure
1.09Terms of references
The scope of this report entails general information, planning and monitoring, on-site
examination domain, and quality assurance domain and risk management. Risk management
contains risk management, fraud detection, and business community plan. The quality assurance
domain contains a review of draft violations, exit meeting, its chart, and report (Murimi, 2017).
The on-site examination domain contains the pre-examination activities, fieldwork and related
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Executive
President
Oversight of
Banking
development of
banking
examination of
banking
serveillance of
banking
bank credit
islamic Banking
market
operations and
investment
market research
monetary
operations
institutional
monetary
services
treasury
investment
Services in
Finance and
Operations
project
managment
organisational
development
managment of
quality
IT
IT secretariate
Technical advise
and service
Planning and
Monitoring
Domain (PD)
on-site
examination
Domain
quality assurance
domain
Corporate
Services
Administration
legal
HR development
corporate
Communications
economics
Research and
statistics
international
Relations