islamic finance

Sohar Islamic Introduces Shari’a compliant Escrow

July 1, 2021

Reiterating its strong market position and investor confidence, Sohar Islamic – Sohar International’s Islamic Window, has introduced Escrow Accounts for Oman’s burgeoning real estate sector.

This financial solution comes in line with Royal Decree No. 30/2018 promulgating the law on escrow account for real estate development and Ministerial Decision No. 72/2019 issued by the Ministry of Housing and Urban Planning.

The Escrow account was promulgated in a move to regulate real estate market and to further provide more protection to investors when purchasing properties. As the country witnesses key legislative reforms with new laws and regulations, as well as the introduction of strict measures to ensure implementation of good governance, Sohar Islamic is keen to contribute and support the government’s efforts in providing impetus to the real estate sector.

The introduction of escrow account is key to this objective, as it provides the proper financial tools for developers as well as protects investors by creating trust and transparency.

Commenting on the introduction of Escrow Account, Abdul Wahid Al Murshidi, Chief Islamic Banking Officer at Sohar International said: “With several commercial, tourist, and residential projects underway within the Sultanate, Escrow Accounts have become an essential part of the framework to provide stimulus to the sector’s growth, as it protects investors by minimizing the risk prevalent in any real estate purchase. This will significantly contribute to the long-term socio-economic development in the country. The newly introduced Escrow Account aims at enhancing confidence of real estate developers, investors, as well as vendors, whilst protecting their interests with an ultimate purpose to support the government’s efforts to regulate the real estate sector.”

Following the introduction of the Escrow Account, Sohar Islamic was quick on harnessing this capability and signed an agreement with Muscat Hills Joint Development Company to open Escrow account for the Muscat Pavilion Project for Smart Offices in Muscat. Representing Sohar Islamic and signing the agreement was Mr. Abdul Wahid Al Murshdi, Chief Islamic Banking Officer at Sohar International with Dawood Al Hinai and Abdul Rahim Al Kharousi, Co-founders of Muscat Hills Joint Development Company.

“In our constant endeavour to provide financing services meeting the social and economic aspirations of citizens in the sultanate, we are happy to tie up with Asawer Real Estate in providing escrow account to the project. With this agreement, Sohar Islamic acts as an escrow agent, which accepts all funds and then releases these funds in accordance with the progress of the project and as per the terms of the escrow agreement,” added Al Murshdi.

Opening Sohar Islamic’s fully Shariah-compliant Escrow Account requires a few easy steps. Once the account is active, it can then be communicated to the potential investors by the developers, which will not only increase the investors’ confidence, but will also regulate and ensure the developers are paid on time which enhancing the overall experience.

It is important that the developer interested in opening the Escrow Account submits all the necessary documents in any of the bank branches.

Under Sohar International’s vision and strategy, Sohar Islamic continues to realign itself to provide the right mix of products, people, and systems to help drive its next phase of growth.

Sohar Islamic forms an integral part of all of the bank’s strategic way forward plans, and the new Escrow account services comes in the framework of enabling all parties to grow and deliver enhanced performance enabling them to win.

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