The key objective of prize draw savings schemes introduced by banks in Oman was to provide customers a financial incentive to save with safety and liquidity. Banks have seen increasing deposits from Omani customers, indicating the development of a savings habit. To encourage more savings, banks annually increase total prize money and introduce innovative products like hourly prize draws and higher interest rates during holidays. However, a survey found that most Omanis feel their savings are inadequate, though bank savings accounts are the most popular option, providing hope that savings levels are improving.

1. 24 Business Today MARCH 2014 www.businesstoday.co.om
COVER STORY
'Saving is a very fine thing.
Especially when your parents
have done it for you'. This
famous quote from former
British Prime Minister Winston
Churchill could easily sum up the
prevalent, popular attitude
towards savings.
Saving money is always a
difficult proposition for everyone
but even more so for the young
Omani. Be it on cars, phones, or
even holidays, the opportunities
for splurging are many. In order
to change that attitude and
introduce a systematic saving
habit, the banks introduced the
prize draw saving schemes.
The key objective was to
provide customers a financial
incentive for saving with the
bank while providing them with
safety and liquidity for their hard
earned money.
A clear indicator
Rising deposits from Omani
customers is a clear indicator that
things are improving. Says Amjad
Iqbal Hassan al Lawati, head -
products & services management
at Bank Muscat, “The bank’s
savings deposits have consist-
ently increased over the years
and Bank Muscat has over a 45
per cent market share of savings
BANKING ON
SAVINGS
Banks have been offering weekly, monthly and yearly draws with huge
prize money – is this encouraging people to save more?
By Maheswaran P
Cover story/E1:BusinessToday 2/27/14 9:30 PM Page 1

2. www.businesstoday.co.om MARCH 2014 Business Today 25
deposits. The remaining 55 per
cent of the deposits is distributed
across the remaining banks. The
high market share is a testimony
to the trust customers have
reposed on the Al Mazyona
brand over the years.”
Moosa al Jadidi, acting head
of retail and private banking,
National Bank of Oman (NBO)
says, “The kind of growth we are
witnessing in our deposit
portfolio clearly shows that the
response has been extremely
good. A large portion of our
deposits growth comes from our
Omani customers. So this is a
clear indication that there is a
savings habit among them. We
have seen double digit growth in
our Omani deposit portfolio from
2012 to 2013.”
The situation is the same at
Bank Sohar. R Narasimhan, DGM
and head of retail banking at
Bank Sohar, says, “The savings
deposits portfolio of the bank
BANK MUSCAT’S SAVINGS DEPOSITS HAVE CONSISTENTLY INCREASED OVER THE YEARS
AND OUR 45 PER CENT MARKET SHARE STANDS TESTIMONY TO THE TRUST CUSTOMERS
HAVE REPOSED ON THE AL MAZYONA BRAND, SAYS AMJAD IQBAL HASSAN AL LAWATI
crossed the RO215mn mark by
the end of 2013. Similar achieve-
ments have taken competitor
banks a much longer time and
branch base to realise. This
performance manifests the
public’s appreciation of the bank’s
innovative schemes and services
that have been offered. This year
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3. 26 Business Today MARCH 2014 www.businesstoday.co.om
too, the upward trend will
continue at an even faster pace
based on optimistic initial
customer feedback about the
2014 scheme.”
Such has been the response
from customers that banks are
now increasing the total prize
money every year.
The treasure chest
Bank Muscat has a savings
scheme called Al Mazyona which
gives customers a chance to win
cash prizes by maintaining a
minimum balance of RO100. The
scheme, which is two decades
old, had started with wrist
watches as gifts for the winners.
This gradually increased to
higher value items such as cars
and houses before graduating to
pure cash prizes.
The response from customers
has been excellent and as a result
the bank has now increased its
total prize money for 2014 from
RO7mn to RO8mn.
COVER STORY
BANK SOHAR’S POPULAR AL MUMAYAZ SCHEME IS AIMED AT THE PUBLIC TO MEET THEIR
FINANCIAL NEEDS, ASPIRATIONS TO ACQUIRE ASSETS AS WELL AS TO ENSURE THAT THEY
HAVE ENOUGH FUNDS TO MEET UNFORESEEN CONTINGENCIES, SAYS R NARASIMHAN
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“The response from
customers has been very encour-
aging. The increase in customers
who are participating in the Al
Mazyona savings scheme shows
that there is demand for the
product,” Lawati says.
NBO has a similar prize linked
savings deposit scheme called Al
Kanz. “For us, the response has
been amazing and that's why we
are consistent with the prize
scheme. We are also increasing
the prize money every year. In
2012, we launched the million-
aire scheme where an individual
can win up to RO1mn. Our
concept is to stick to the brand
that we have created for Al Kanz.
If you look at the figures from
January to September last year,
NBO was the top bank which
experienced the fastest growth
in the market.”
Bank Sohar introduced the Al
Mumayaz scheme in 2007. “This
is a branded bank savings
scheme aiming to encourage the
public to meet their financial
needs, aspirations to acquire
assets as well as to ensure they
have enough funds to meet
unforeseen contingencies. The
scheme is a very popular one.
Majority of the Omanis have
good awareness about the
importance of savings and we as
a bank, pay a lot of attention to
this matter,” says Narasimhan.
The Al Mumayaz scheme is
the only scheme to have hourly
prize draws which no other bank
has done so far.
“The distinguishing feature of
our scheme is that we are the
only bank in the market to have
hourly prize draws; thereby the
number of beneficiaries under
this scheme is the highest in the
market and it also keeps the
clients’ interest in the scheme
alive to encourage more and
more savings,” adds Narasimhan.
Special offers
NBO is also encouraging
customers to save during the
festival season and not spend
their hard earned money, by
increasing the interest rate by five
times during certain months of
the year.
“Last year, we launched a
savings scheme called Super
Saver Account in which we offer
0.5 per cent interest. Customers
have a tendency to spend the
money especially during the
festive seasons. In order to dis-
courage customers from
splurging their hard earned
money and make them save
more during festivals like Eid or
during Ramadan, we increase
the interest rates by five times.
This offer is for one or two
months a year and customers
will only be eligible if they don't
withdraw money during this
period,” Jadidi says.
The scheme was launched last
year and so far NBO is the only
COVER STORY
The key objective of the prize draw savings schemes
introduced by banks in the sultanate was to provide
customers a financial incentive for saving with the bank
while providing them with safety and liquidity for their
hard earned money
SELECTION
OFSAVING
INSTRUMENTS
The top three factors
affecting savers’ selection
Oman: Sound reputation of
the provider, attractive returns
and sharia compliance, in that
order
Saudi Arabia: Sharia
compliance, capital guarantee
and attractive returns, in that
order
Bahrain: Sharia compliance,
attractive returns and the
sound reputation of the
provider, in that order
Kuwait: Sharia compliance,
the sound reputation of the
provider and attractive returns,
in that order
Qatar: Attractive returns, sharia
compliance, and the sound
reputation of the provider, in
that order
Source: GCC Savings Index Report 2013, National
Bond Corporation
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5. www.businesstoday.co.om MARCH 2014 Business Today 29
bank with this kind of a product.
Catch them young
In order to introduce banking
and a savings habit to customers
at a very young age, banks have
introduced different schemes for
young children and teenagers to
save money.
Bank Muscat has a children’s
account called Al Mazyona
Children's Account, which offers
a host of benefits such as
separate draws for the childrens’
birthdays. With a monthly
minimum balance of RO50 they
become eligible for the monthly
prize draw of RO100. The bank
will also contribute RO100 per
month towards the child’s
schooling expenses until they
turn 18, should anything unfor-
tunate happen to the parent. Not
just that, the child will also be
THE RESPONSE FOR NBO’S AL KANZ HAS BEEN AMAZING AND THAT'S WHY WE ARE
CONSISTENT WITH THE PRIZE SCHEME. WE ARE ALSO INCREASING THE PRIZE MONEY
EVERY YEAR, SAYS MOOSA AL JADIDI
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eligible to apply for an interest-
free four-year education loan
once he or she turns 18.
NBO's child deposit savings
scheme, Al Amaal covers
children till the age of 18.
Jadidi says this account offers
a host of benefits, first and
foremost of which is the interest
rate which is 1.5 per cent.
“It is given on a monthly basis
and is the highest in the country.
We are offering this because the
parent wants to open a child
account so that the money
grows when the child grows. All
banks are offering various
accounts for children but none of
them are offering interest. On
top of this we are giving a free
life insurance of RO50,000 for
both the parents together. So if
anything happens to the parent,
the child's future is safe.”
NBO has also a youth account
called Mustaqbali savings
account. Any youngster between
the age of 18 and 25 can open
this account. Under this account
the bank offers the customer a
student loan if he or she is
planning for higher studies. The
bank will also offer personal and
housing loans at a discount and
a credit card with the first year
free of charges.
For youngsters who love trav-
elling, the bank offers free travel
insurance up to US$10,000
under the Mustaqbali scheme.
Encouraging expatriates
Even though these schemes
were initially popular only with
Omanis, they have now become
quite popular among expatriates
as well.
There is a general misconcep-
tion that only Omanis win the
top prizes as opposed to expatri-
ates. Jadidi says this is not true
and expatriates too have an
equal chance to win and the
reason why Omani customers
win most of the time is because
the ratio of Omani customers to
expatriates is 85 to 15.
“So the probability of an
Omani customer winning is
higher. In 2014 the bumper prize
money of RO100,000 was won
by an expat, which shows that
the prize draw is not only for
Omani customers. We want
to highlight this year’s winner and
convey to all expats that they
have an equal chance to win.
They can maximise their chances
by increasing their investments in
Al Kanz and keeping their money
for a longer period.”
Lawati adds that the response
from expatriates have been
encouraging and there is a
healthy and growing contribu-
tion of savings deposits with
Bank Muscat from other nation-
alities to the overall bank’s
savings deposits portfolio.
Bank Sohar also has several
expats who have won the savings
scheme prizes including high
value tickets and their savings
grow on sustainable basis.
The future
Even though the banks are
bullish about savings with their
deposits going up, findings of
the National Bonds 2013 Saving
Index report for the GCC paints a
different picture.
The survey says that 52 per
cent of the people in Oman have
indicated that their savings are
not adequate for the future. The
study further revealed that 13
per cent believe their savings
were sufficient for the future,
and only one per cent felt that
their savings were more than
enough for the future.
However the survey also
indicated that general bank
savings accounts had emerged
as the most popular savings
option in Oman, Bahrain, Kuwait
and Qatar. So, with the rise in
deposits in the banks, there is a
definite hope that things are
moving in the right direction. g
COVER STORY
CURRENT
SAVINGS
77% of the respondents in
Oman believed they were not
saving as much as they had
planned for in 2013, which has
gone up in comparison to the
72 per cent of 2012
Source: GCC Savings Index Report 2013, National
Bond Corporation
KEYPRIORITIES
FORSAVING
g In three of the six GCC
countries, Oman, Kuwait and
Qatar, respondents indicated
that children’s education
ranked first in the savings
priorities. In Saudi Arabia,
purchase of property for
personal use and in Bahrain,
retirement were the key
priorities behind savings
g In Oman, retirement and
purchase of property for
personal use were ranked
second and third respectively
Source: GCC Savings Index Report 2013, National
Bond Corporation
Innovative products introduced by the banks keeps customers
interested. Bank Sohar’s Al Mumayaz scheme offers hourly
prize draws, NBO's Super Saver Account offers five times the
usual interest rate during the festive period if money isn't with-
drawn, while Bank Muscat's children’s account offers a host of
benefits such as separate draws for the children's birthday
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