For a better view on Central Bank of The Bahamas, Update Your Browser.


Monetary Policy is the term used to characterise the measures taken by a central bank, in order to influence an economy. This is done principally through the central bank's regulation of the flow of money and credit in the banking system. In The Bahamas, the fundamental objective of monetary policy has always been to maintain stable credit and other conditions to support the fixed parity between The Bahamian and U.S. dollars, which has prevailed since 1973, while simultaneously allowing the economic development objective to be pursued.

Fiscal Policy is the term used to characterise measures taken by a government to influence an economy. These decisions involve mainly government's use of expenditure and taxation policies to bring about desired macroeconomic objectives.

Persons can subscribe to the Annual Report by writing to the Bank. This and all other publications are also available on the Bank's website. The Bank's publications are free of charge to the public.

The Central Bank produces four publications: the Annual Report, Quarterly Economic Review, Quarterly Statistical Digest and the Monthly Economic and Financial Developments Report, which are available to the public free of charge. Quarterly publications are issued in February, May, August and November, while the Annual Reports are available by April of the following year.

The sanddollar is an invertebrate marine animal that has a flat disk-shaped body. It is particularly well adapted for burrowing in sand banks. The entire surface of the animal's body is covered by small spines, which are used for digging and crawling. The mouth is located in the centre of the body's underside and on the upperside there is a pattern of five 'petals' spreading out from the centre.

The selection of the sanddollar as the logo of the Central Bank was made by the first Governor, Mr. T. B. Donaldson, who, in addition to wanting something Bahamian, was 'intrigued by the elegance and history' of this unusual specimen of marine life, of which an interesting legend exists. The markings on the shell of the sanddollar are said to symbolize the birth, crucifixion and resurrection of Christ.

On the topside of the shell, an outline of the Easter Lily is clearly seen. At the centre of the Lily, a five-pointed star representing the Star of Bethlehem appears. The five narrow openings are said to be representative of the four nail holes and the spear wound made in the body of Christ during the Crucifixion. Easily recognizable on the reverse side of the shell is the outline of the Christmas Poinsettia and also the Bell. When broken, inside the shell are five birds called Doves of Peace. Some say they are the Angels that sang to the shepherds on the first Christmas morning.

The Central Bank is a statutory body, distinct and separate from the central government as set out in the Central Bank of The Bahamas Act, 2000, Section 3, Subsection

(2): The Bank shall be a body corporate having perpetual succession and a common seal and subject to the provisions of this Act, with power to acquire, hold and dispose of movable and immovable property of whatever kind, and to enter into contracts and to do all things necessary for the purpose of its functions.

The Bank is run by a Board of Directors, which has overall responsibility for policy and the management of its affairs and business.

The present Governor of the Central Bank is Mr John A. Rolle, who has held this position since January 2016. Mr. Dereck Rolle is the current Deputy Governor, having been appointed August 1, 2017. Former Governors are Mrs Wendy M. Craigg (2005 - 2015), Mr Julian W. Francis (1997 - 2005), Mr James H. Smith (1987 - 1997), Sir William C. Allen (1980 - 1987) and Mr T. Baswell Donaldson (1974 - 1980). Previous Deputy Governors are Mr. Michael Lightbourne (2007-2017), Mrs Wendy M. Craigg (1997-2005), Mr Julian W. Francis (1993 - 1997), Mr Hubert L. Dean (1981 - 1992 ) and Sir. William C. Allen (1974 - 1980).

The Central Bank generates income from the following sources:

  1. Interest earned on advances made to Government and on holdings of Treasury bills and Registered Stocks;
  2. Interest earned on foreign currency securities and deposits;
  3. Commissions received on foreign exchange transactions; and
  4. Royalties and commissions earned from numismatic coin sales.

The Central Bank does not accept deposits or make loans to private individuals. However, as the banker to the Government, it accepts deposits from the Government, public corporations and international financial institutions. The Central Bank lends to the Government by means of direct advances and/or by buying Government securities, such as Treasury bills and Registered Stocks. The Bank may also lend to commercial banks, which is normally done against the security of Registered Stock.

Date Rate
1980 10.00%
Apr-83 9.00%
Dec-84 9.50%
May-85 8.50%
May-86 7.50%
Dec-87 9.00%
Feb-92 7.50%
May-93 7.00%
Apr-94 6.50%
Jul-99 5.75%
Feb-05 5.25%
Jun-2011 4.50%
Dec-2016 4.00%


The Discount or Bank Rate, which is set by the Central Bank of The Bahamas, is the interest rate charged by the Bank on loans to banks. Commercial banks usually respond to changes in the Discount Rate with proportionate changes in their Prime Lending Rate. The Discount Rate is an instrument of Discount Policy, and is used by the Bank to influence the flow of money and credit in a desired direction. For instance, since people's borrowing decisions, whether for investment or consumption purposes, is influenced by the interest rate charged on that borrowing, an increase(decrease) in the Discount Rate signals a desire by the Bank to slow(quicken) the rate of increase in credit expansion, since higher(lower) interest rate charges are likely to discourage(encourage) new borrowing.

By law, deposit money banks are obliged to hold a specified proportion of their deposits in cash or near-cash assets known as reserve requirements. Banks are prohibited from using such reserves to extend loans to customers. An increase in this requirement would limit the amount of loans that a bank is able to extend to its clients, whereas a reduction would increase the amount of funds available for lending. The Central Bank then, is able to influence the supply of money by either increasing or decreasing this requirement.

There are two types of reserve requirements employed by the Bank. In accordance with the Central Bank of The Bahamas Act, 2000, banks are required to maintain primary reserves referred to as the 'Statutory Reserve', against their Bahamian dollar liabilities. Since coming into force in 1974, the ratio has been unchanged at 5.0%, although the Bank does have the authority to raise it to 20.0%.

The Central Bank is also empowered to impose a secondary reserve, called the Liquid Asset Ratio(LAR), which mandates banks to maintain an average ratio of liquid assets in relation to their Bahamian dollar deposit liabilities. The LAR is currently set at 20.0% of demand deposits, 15.0% of savings and fixed deposits, and 15.0% of borrowings due to or from the Central Bank as well as inter-bank.

Among the functions of the Central Bank of The Bahamas, the regulation of the supply of money and credit is especially important to the Bank's overall objective of monetary stability. Accordingly, there are five primary instruments through which the Bank seeks to influence the flow and supply of money and credit in the banking system: Reserve Requirements, Discount Policy, Selective Credit Controls, Moral Suasion and Open Market Operations. In The Bahamas, while Open Market Operations have been employed within a very limited context, and Reserve Requirements have remained virtually unchanged, Discount Policy--supplemented by Moral Suasion--have been used with far greater regularity, and have been most effective in the Bank's efforts to manage bank liquidity.

No, the Central Bank does not set interest rates nor any other fees or charges required by commercial banks. The Central Bank sets only the Discount (Bank) Rate, which is the rate at which it lends to banks. Banks might adjust their Prime Rate, the rate at which they lend to their best customers, in response to changes in the Discount Rate, but the ultimate rate offered to consumers and investors is at the discretion of commercial banks; bank fees and charges are set solely by the banks themselves.

Date Rate
1974 9.50%
Apr-79 9.00%
Feb-80 11.00%
May-85 10.00%
May-86 9.00%
Feb-92 8.00%
Jan-93 7.75%
Jun-93 7.25%
Apr-94 6.75%
Jul-99 6.00%
Feb-05 5.50%
Jun-11 4.75%
Dec-2016 4.25%


The Prime Rate is the lowest rate of interest charged by commercial banks on loans to their best customers. The Prime Rate is used as a base from which interest rates on loans to the private sector are determined. Although this rate is set by the commercial banks themselves, a clear linkage to the Central Bank's Discount Rate can be observed, reflecting banks' response to changes in Central Bank monetary measures.

There are eight commercial banks in The Bahamas, two of which are Bahamian owned. These are: Fidelity Bank (Bahamas) Ltd., Citibank N.A., FirstCaribbean International Bank (Bahamas) (FCIB) Ltd., The Finance Corporation of The Bahamas (FINCO), Royal Bank of Canada, and Scotiabank Bahamas Limited. Bahamian-owned commercial banks are the Bank of The Bahamas International Ltd. and Commonwealth Bank Ltd.

A commercial bank is a bank whose main functions are to accept demand deposits and to make loans, thereby facilitating the transfer of funds in the economy. Typically, commercial banks make loans to business firms, private individuals, and government related entities. They also issue time and savings deposits and operate trust departments. Though commercial banks do not issue currency, they do issue money in the form of demand deposits, hence they have the power of creating and destroying money.

In the morning of each official business day, and under the supervision of an Officer of the Central Bank's Banking Department, representatives of the commercial banks meet at the Central Bank to exchange cheques honoured by each bank on behalf of the other. Immediate settlement of balances arising out of the mutual claims and debts is effected through a credit or debit entry on the respective banks' account held with the Central Bank. In the afternoon, a special clearing facility is provided to accommodate various inter-bank payments such as loans and repayments of loans. At this clearing, cheques are drawn by commercial banks on their accounts with the Central Bank, and are presented directly by the banks' representatives to cashiers in the Banking Department, for immediate settlement.

Year Direct Charge Contingent Liabilities National Debt
1987 527.9 78.7 606.6
1988 574.4 86.5 660.9
1989 670.3 117.4 787.6
1990 773.2 146.0 919.2
1991 870.5 303.9 1,174.4
1992 952.4 342.1 1,294.5
1993 1,064.7 350.9 1,415.6
1994 1,136.3 342.7 1,479.0
1995 1,165.8 329.0 1,494.8
1996 1,233.4 314.1 1,547.5
1997 1,376.5 331.8 1,708.4
1998 1,434.3 349.0 1,783.3
1999 1,511.4 376.3 1,887.7
2000 1,516.2 365.1 1,881.4
2001 1,598.3 381.8 1,980.1
2002 1,801.5 422.8 2,224.3
2003 1,936.2 467.5 2,403.7
2004 2,097.9 493.9 2,537.8
2005 2,235.2 497.2 2,732.4
2006 2,836.3 500.9 2,887.1
2007 2,635.5 434.59 3,070.0
2008 2,766.0 446.5 3,212.5
2009 3,321.0 602.5 3,923.5
2010 3,721.1 575.1 4,296.2
2011 3,806.3 558.2 4,364.5
2012 4,399.9 603.3 5,003.2
2013 4,984.0 601.2 5,585.2


The National Debt is the total indebtedness of the Bahamas Government, including claims held by both foreign and local entities. It comprises two main components: Direct Charge and Contingent Liabilities.

Direct Charge refers to the total claims on the central government. Movements in the Direct Charge from one period to the next can be matched to the budget surplus (deficit) over the respective period. A budget surplus may be used to reduce the Direct Charge or build-up cash balances, while a budget deficit has the opposite effect.

Contingent Liabilities refer to claims on public corporations guaranteed by central government. They are included as part of the debt of The Bahamas Government, because they represent potential liabilities, i.e. in the event that a public corporation defaults on such debt or any part thereof, the Government is ultimately responsible for its repayment.

Yes. Generally, commercial banks do accept Bahamas Government Registered Stock (BGRS) as collateral, if the person named on the certificate wishes to obtain a loan.

If you have lost your Bahamas Government Registered Stock (BGRS) certificate the following procedure must be observed:

  1. The stockholder must advertise, in at least one of the daily newspapers, that the stock certificate has been lost.
  2. This advertisement must run for no less than three days.
  3. The stockholder should then submit to the Central Bank, a letter of request for a replacement certificate.
  4. Clippings of the advertisement with publication dates clearly indicated, should accompany this letter as proof that the certificate loss was duly advertised.

The Bank would then publish a notice of the certificate loss in the official Gazette. Within one month of this publication, a new stock certificate can be issued.

Bahamas Government Registered Stock (BGRS) holders may sell their stock to the Central Bank. Persons wishing to do so should submit a written request to the Bank, along with the respective stock certificate. On average, requests are processed within two business days.

The Central Bank of The Bahamas functions as the Official Registrar for securities of the Government. Bahamas Government Registered Stock (BGRS) may be purchased by one of two means:

  1. Initial Public Offering: Prospectus for new stock offerings are published in daily newspapers, and may also be obtained by the general public from either the Central Bank, the Public Treasury, or any commercial bank. Interested investors are required to submit applications to the Central Bank no later than the stipulated deadline. Notably, purchase funds must also be submitted at the time of application or Real-Time Gross Settlement (RTGS) instructions, for amounts in excess of $1.0 million.
  2. Over-the-counter purchase: Interested investors may contact the Central Bank's Banking Department, and should provide the following information: the amount of the desired investment and the type of maturity, or more specifically the period of time over which they wish to hold the security. The Bank will then select an issue in its own portfolio most suitable to the investor's needs and within two business days, is able to make an offer.

Previously, individual purchasers of BGRS had to be Bahamian citizens aged 18 years or older (persons are permitted to purchase stock on behalf of minor children, as long as they are held in trust for those children until they reach majority age). Additionally, institutional investors were either companies that were Bahamian owned, or in the case of banks, licensed to carry out domestic banking. Where investments were made by pension funds, only funds established exclusively for the benefit of Bahamians were permitted to purchase BGRS.

Since January 2006, the Central Bank eased its restrictions on the ownership of Government debt securities, to allow temporary and permanent residents (with restricted right to work) to purchase these securities, provided they do not exceed a limit of $100,000 per person/entity, and are funded from Bahamian dollar (B$) earnings.

The Central Bank of The Bahamas, as agent for the Government, advertises all T-Bill issues on the Government's behalf. Commercial banks, insurance companies and other interested persons, would then tender, or apply for the bills, which are issued in units of $100. Applications are made for the bills in amounts that applicants wish to hold, and at a rate that reflects the amount they wish to earn.

For example, if a company were to tender for a bill in the amount of $100, it might apply at a rate of 98%. This would mean that the company wishes to purchase a bill, which has a face value of $100.00, but is only prepared to pay $98.00 for it. The difference represents the amount it would like to earn from lending the Government $98 for a period of usually 91 days. On an annual basis, this would amount to an interest rate of 8% per year.

There are at least four interest rates associated with Treasury bill issues:

  1. The Average Tender Rate refers to the average of all accepted bids, i.e. the actual amount paid for each $100 Treasury bill.
  2. The Average Discount Rate is determined by subtracting the average tender rate from 100 and multiplying by 4.
  3. The Market Rate is the rate the Central Bank charges on Treasury bills purchased from its portfolio. It is determined as the Average Discount Rate, less 0.1%.
  4. The Rediscount Rate refers to the rate used by the Central Bank to discount Treasury bills offered for sale before maturity. It is determined as the Average Discount Rate plus 0.5%.

As a means of financing expenditure, the Bahamas Government is able to borrow from the private sector through the issuance of its own financial securities. It uses primarily two types of securities: the Treasury bills (T-bills) and Bahamas Government Registered Stock (BGRS).

The T-bill, which carries maturities of less than one year from the date of issue, provides short-term financing to the Government. They are issued to the investor at a discount, which means that the price paid for them is below the actual face value. Upon maturity, the investor receives an amount equal to the face value of the T-bill, thus earning income equivalent to the difference between the price paid for the security at issue and the amount received at maturity.

BGRS, which carry maturities in some instances of up to 30 years, provide long-term financing to the Government. With a minimum investment of $100, they are issued at par, in multiples of 100, and carry interest rates which, if not fixed, are usually tied to the Bahamian Prime Rate. The investor then receives interest income, which is normally paid semiannually, and the principal investment at maturity.

Yes, as long as the salient features of the banknote are still present and the banknote can be mended without obscuring any of those important features. Small tears are natural and expected while a banknote is in circulation. Large tears, or missing portions may, however, render a banknote unfit, at which time it should be redeemed at the Central Bank. Multilated and torn banknotes may be redeemed in person between the hours of 9:30 a.m. to 3:00 p.m. Monday through Friday at the Bank's Cash Services Centre, provided they possess one complete serial number and at least 50% of the Governor's signature.

The Central Bank of The Bahamas has the sole right and authority to issue banknotes and coins, and as such is obligated to the holders of Bahamian banknotes and coins to honour payment in the respective amounts. Central Bank issued banknotes are the sole legal tender of The Bahamas in accordance with the Cental Bank of The Bahamas Act, 2000. Accordingly, the Central Bank of The Bahamas has no legal obligation to honour counterfeit money. Moreover, since the Bank really has no way of determining whether someone has received a counterfeit banknote by accident, or instead has purposefully attempted to defraud the banking system, holders of counterfeit currency are not reimbursed.

If you have determined that you have a counterfeit banknote, you should contact the Commercial Crime Section of the Criminal Investigation Department, Royal Bahamas Police Force at 322-4191. If you suspect a banknote to be counterfeit, you should contact the Cash Services Centre at the Central Bank of The Bahamas at telephone numbers: 302-2731 or 302-2732. A representative in that centre will route you to a banknote expert, who will help you determine if the banknote is counterfeit.

Yes. The $1/2 and $3 banknotes, and the 15-cent coin are still issued by the Bank. While many view these as collector's items, these denominations remain legal tender and readily availabe for issue.

Bahamas banknotes may not be reproduced by anyone for any reason without the expressed written permission of the Central Bank of The Bahamas. However, the Bank may, at its discretion, permit the display of banknote and coin images in printed format at no greater than 75% of their actual sizes.

Generally, the volume of banknotes and coins issued into circulation is a reflection of banks' demand for currency. This demand is influenced by such factors as: increased prices, seasonal increases in consumer spending during holiday and summer months, 'back-to-school', and pay periods.

According to the Central Bank of The Bahamas Act 2000, it is the sole right of the Central Bank to issue banknotes. Through the Central Bank of The Bahamas' Banking Department, banks request banknotes and coins according to their day-to-day needs, which are generally furnished upon request. Such transactions between the Central Bank and commercial banks are often carried out on a daily basis.

Bahamian dollar banknotes are printed by De la Rue, Basingstoke, Hampshire, England and Francois-Charles Oberthur, Paris, France while coins are minted by the Royal Canadian Mint, Ottawa, Ontario, Canada and Royal Mint, United Kingdom.

At end-December 2006, external reserves stood at $499.8 million. In millions of Bahamian dollars, the following shows how the country's stock of external reserves has varied over the years:


Year B$ Millions
1996 163.0
1997 219.5
1998 338.8
1999 404.0
2000 342.6
2001 312.4
2002 373.2
2003 484.3
2004 667.8
2005 578.8
2006 499.8


Given the structural character of the economy-- a small, open, services-based economy-- there is a high reliance on imports for consumption and capital development. The administration of exchange control ensures that the economy is able to meet its foreign exchange demands, through the disciplined use of the country's foreign currency reserves.

Upon establishment, the Central Bank was given a statutory mandate to ensure that external reserves are maintained at 50% of the value of total notes and coins in circulation and demand liabilities of the Bank; and for the most part, external reserves have been maintained comfortably above this statutory minimum.

Another indicator of foreign currency reserve capacity is the import cover, measured in weeks, which compares the level of external reserves to the value of imports of merchandise goods (excluding oil and including freight and insurance) over the corresponding period. By international convention, this ratio should fall no lower than 12 weeks.

By virtue of the fixed exchange rate and exchange controls, which limit the net foreign currency exposure that commercial banks are allowed to have in their local operations, the Central Bank acts as the reservoir for excess foreign currency flowing through the economy, and is obligated to meet any net shortfall that the system experiences.

The seasonal pattern of flows is such that the Bank acts as a net buyer of foreign exchange during the first half of each year and as a net seller during the second half. International quotations, obtained daily, are used to determine exchange rates between the Bahamian Dollar and foreign currencies, particularly for non-US currencies. The rates are communicated to the commercial banks, and become the basis of the rates at which those banks buy and sell foreign exchange from and to residents.

The Central Bank utilizes a part of its external reserves to maintain the local trade market in foreign-exchange currencies between itself, the Government, Public Corporations and the commercial banks. The excess of the reserves from the local market is invested on the international market in short-term deposits, foreign government securities and bonds.

Bahamian citizens who have or intend to take up permanent residence outside The Bahamas are required to 'formally emigrate' for Exchange Control purposes. Forms to assist in this process are available in the Exchange Control Department and must be completed in duplicate and supported by evidence that the applicant has been accepted as a permanent resident of another country (e.g. copy of Permanent Resident certificate or copy of Green Card for those living in the United States).

Real property transactions are governed by the International Persons Land Holdings Act, which is administered by the Investments Board in the Office of The Prime Minister. However, the non-resident who invests in real property must register their investment with the Exchange Control Department. The term given to this registration is 'Approved Investment Status'. Approved Investment Status guarantees non-resident investors that they will be permitted to repatriate, upon application, income derived from the sale of any real property or any income received therefrom (e.g. rental income). The investor must produce documentary evidence, to the satisfaction of the Exchange Control Department, in support of the investment.

Non-Bahamians employed in The Bahamas under formal Government contract or valid work permit (temporary residents) are permitted, with the prior permission of the Central Bank, to remit up to 50% of their income abroad to meet their foreign currency obligations. In support of their application to do so, they must also provide a letter confirming their annual salary along with a copy of the permit/contract under which they are employed in The Bahamas.

Persons regarded as non-resident for Exchange Control purposes are not normally permitted to borrow Bahamian dollars. Bahamian incorporated companies with non-resident ownership are expected to borrow in foreign currency, proportionate to the equity interest in the company. Such companies however may, with the prior approval of the Central Bank, borrow in Bahamian dollars for non-capital related items.

The prior approval of the Exchange Control Department is required to remit foreign currency to any individual studying abroad. Application in respect of it must be accompanied by documentary evidence confirming the enrolment of the student abroad (i.e. a copy of a letter of acceptance or I-20 form for U.S. based schools). However, persons regarded as resident for Exchange Control purposes may remit, without limit, foreign currency to educational institutions abroad upon presentation to an Authorised Dealer (Commercial Bank) of documentary evidence confirming the student's enrolment abroad.

Yes, Bahamians are permitted to invest in financial securities abroad, but they must purchase the foreign currency required to make such investments through the medium of the Investment Currency Market. The Banking Department of the Central Bank operates the market in investment dollars.

Established in 1972, the Investment Currency Market was prescribed for the purchase of foreign currency securities from non-residents and direct investments outside The Bahamas. In late 1989, the Bank assumed responsibility for the administration of the ICM, which at the time was almost illiquid.

From the Central Bank's perspective, investment currency bid and offer transactions attract a premium of 10% and 12.5%, respectively vis-a-vis 6.75% and 13.0% in 1974. This means, therefore, that a resident who wants to purchase foreign currency securities today may acquire them by purchasing investment currency from the Investment Currency Market at a premium of 12.5%. If they were to sell the proceeds of the securities as investment currency, they would realize a premium of 10%.

Entities resident for Exchange Control purposes (e.g. Bahamians and permanent residents without restrictions on employment or companies which they own) require the prior permission of the Exchange Control Department of the Central Bank, to operate foreign currency accounts. Such individuals are usually excluded from maintaining such accounts. However, the companies in which they have an equity interest may qualify to operate foreign currency accounts.

When a bank or trust company is forced into liquidation, the Supreme Court will appoint an official Liquidator who will be responsible for the execution of all matters pertaining to the closure of that institution. Depositors and/or trust clients will be duly notified of this appointment, and will be requested to submit all claims and/or requests for transfer of assets under administration, in writing to the Liquidator.

Institutions which voluntarily liquidate, must give due notice in the local papers, and are obligated to notify all clients of the liquidation, and to address their claims. Should a creditor be unsatisfied with the shareholders' appointed liquidator, he/she may approach the Courts and petition for a Court appointed liquidator and supervision of the liquidation process by the Courts.

In the wake of supra-national initiatives launched by the Financial Stability Forum (FSF) and the Financial Action Task Force (FATF), as well the US Treasury led Qualified Jurisdiction (QJ) initiative, the Government embarked on an ambitious overhaul of financial sector legislation-enacting 9 new laws on the 29th December, 2000. These provide for more comprehensive and enhanced supervision of financial institutions, corporate service providers and international business companies, and establish a more coordinated system of deterrence against money laundering and other criminal abuses within the financial sector through a framework that encompasses more international cooperation in the oversight of the financial system. The new laws include: 

  • The Banks and Trust Companies Regulation Act, 2000
  • The Central Bank of The Bahamas Act, 2000
  • The Financial Intelligence Unit Act, 2000
  • The Proceeds of Crime Act, 2000
  • The Financial and Corporate Service Providers Act, 2000
  • The Financial Transactions Reporting Act, 2000
  • The International Business Companies Act, 2000
  • The Evidence (Proceedings in other Jurisdictions) Act, 2000
  • Criminal Justice (International Cooperation) Act, 2000

The Bahamas was granted Qualified Jurisdiction Status on the 9th January, 2001. Further, The Bahamas was removed from the FATF 'blacklist' on the 22nd June 2001.

Since the implementation of the new legal and regulatory framework (which included a nine-piece package of new legislation) through to end-December 2006, approximately 200 banks and trust companies have had their licenses revoked.

The Bank Supervision Department has prepared a publication entitled "General Information and Guidelines for Licence Applications for Banking and/or Trust Companies". A copy of this document may be downloaded from the Publications section of this site.

Yes. Persons should submit complaints in writing, to the attention of The Manager of The Bank Supervision Department of the Central Bank of The Bahamas. The Bank does not act as arbitrator and does not have legal powers to settle disputes. It acts mainly as an intermediary between the complainant and the bank in question, and seeks to establish a factual account of the situation or issue that led to the complaint and to determine whether any violation of laws, regulations, policy, or guidelines has occurred.

If the matter compromises any of the aforementioned, or if the customer's rights have in any way been infringed upon, the Bank may, as determined necessary, seek to verify the deficiencies of that institution via its on-site inspection powers and address the situation in an appropriate manner. Regardless of the outcome of the mediation by the Bank, the complainant can also seek legal remedies through the courts.

Offshore banking is a term used to describe banking activity in currencies other than the currency of the country in which the bank accounts are held. Countries / territories conducting such business are called offshore financial centres. Certain parties view offshore banking as meaning banking by non-resident persons in a jurisdiction; however, this description is not appropriate. In The Bahamas, these activities dwarf local currency banking business.

Banks which conduct business solely with non-residents are designated non-resident for exchange control purposes and are not allowed to offer services to residents without the approval of the Central Bank, thus enabling a clear differentiation between the domestic and offshore sectors, and ensuring effective conduct of domestic monetary policy.

At end-June 2007, there were 245 banks and trust companies licensed to do business in The Bahamas. Licensees comprising institutions authorised as either banks or trust companies, as well as those licensed to conduct business of both a bank and a trust company, included 139 public companies, 94 restricted institutions and 12 non-active.

An Authorised Agent is a trust company authorised by the Central Bank to deal in Bahamian and foreign securities, and to receive securities into deposit (i.e. to act as custodian) in accordance with the terms of Exchange Control Regulations Act, 1965 and Exchange Control Notices issued by the Bank. They can offer trust / fiduciary services to residents and non-residents.

As of September 30, 2007 there were fifteen Authorised Agents operating in The Bahamas, namely:

Ansbacher (Bahamas) Limited, The Bank of Nova Scotia Trust Company (Bahamas) Limited, Bank of The Bahamas Trust Limited, CIBC Trust Company Bahamas) Limited, Cititrust (Bahamas) Limited, Fidelity Merchant Bank and Trust Limited, Latin American Investment Bank Bahamas Limited, J.P. Morgan Trust Co. (Bahamas) Ltd., Pictet Overseas Trust Coporation Lmited, Royal Bank of Canada, SG Hambros Bank and Trust (Bahamas) Limited, Butterfield Bank (Bahamas) Limited, Royal Bank of Canada Trust Company (Bahamas) Limited, UBS Trustees (Bahamas) Limited and Lloyds TSB Bank (In Liquidation).

An Authorised Dealer is a bank which has been authorised by the Central Bank to deal in gold and all foreign currencies, and for this purpose, can open and maintain accounts in such currencies within the limits established by the Bank. Under authority delegated by the Central Bank, an authorised dealer can approve certain applications for foreign currency within specified limits. They can offer banking services to resident and non-resident clients.

As of September 30, 2007 there were eight Authorised Dealers operating in The Bahamas, namely:

Bank of The Bahamas International Limited, Fidelity Bank (Bahamas) Limited, FirstCaribbean International Bank Limited, Citibank N.A., Commonwealth Bank Limited, Finance Corporation of the Bahamas Limited, Royal Bank of Canada and Scotiabank (Bahamas) Limited.

The primary function of a trust company is to act as a trustee, fiduciary or agent for individuals or firms in a variety of capacities, such as administering trust funds (including their investment), executing wills, acting as custodian for property held in trust, etc. Trust companies designated resident can only deal with residents, and those designated non-resident deal only with non-resident clients. These licensees cannot accept deposits from clients, but they can hold monies in trust for clients to enable settlement of local expenses and fees.

The importance of banking and finance to the Bahamian economy far exceeds references to absolute size. Ranking second only to tourism, the sector contributes an estimated 15% of the country's Gross Domestic Product (GDP). In 2006, banks and trust companies employed 4,662 persons, and spent $445.0 million as compared to $408.3 million in 2005.

Over the years, two of the major underlying benefits of having a competitive banking and financial sector have been the steady development of human resource infrastructure in tandem with evolving professional and technical service demands, and the promotion of telecommunication advancements, which have kept the sector apace with the rest of the world.

Indicators of the industry's overall contribution in most recent years include:

  1. Total employment and the average annual salary for domestic companies - 1995: 2,903 and $30,141, 1996: 2,980 and $31,074, 1997: 3,050 and $32,820, 1998: 3,178 and $33,296, 1999: 3,203 and $35,270, 2000: 3,270 and $39,112, 2001: 3,371and $37,064, 2002: 3,309 and $39,250, 2003: 3,208 and $40,352, 2004: 3,185 and $39,699, 2005: 3,424 and $41,618.
  2. Total employment and the average annual salary for offshore companies - 1995: 777 and $43,629, 1996: 806 and $43,052, 1997: 892 and $44,180, 1998: 902 and $46,255, 1999: 978 and $48,874,  2000: 1,139  $53,777, 2001: 1,215 and $57,876, 2002: 1,201 and $60,717, 2003: 1,045 and $64,214, 2004: 1,181 and $70,082, 2005: 1,027 and $66,838.
  3. Total employment and the average annual salary for the industry, including both the domestic and offshore sectors - 1995: 3,680 and $32,989, 1996: 3,786 and $33,624, 1997: 3,942 and $35,388, 1998: 4,080 and  $36,161, 1999: 4,181 and $38,452, 2000: 4,409 and $42,901, 2001: 4,586 and $42,578, 2002: 4,511 and    $44,956, 2003: 4,253 and $46,215,    2004: 4,343 and $47,870, 2005: 4,451 and $47,437.
  4. In millions of Bahamian dollars, operational and capital investment expenditure by domestic companies amounted to - 1995: 138.0 and 12.5, 1996: 169.3 and 14.0, 1997: 185.1 and 12.9, 1998: 180.5 and 9.3, 1999: 203.2 and 15.9, 2000: 207.9 and 14.2, 2001: 231.9 and 25.4, 2002: 230.1 and 13.2, 2003: 225.4 and 11.9, 2004: 250.2 and 27.8, 2005: 253.7 and 12.5.
  5. In millions of Bahamian dollars, operational and capital investment expenditure by offshore companies amounted to - 1995: 80.1 and 7.6, 1996: 80.5 and 11.5, 1997: 90.4 and 8.2, 1998: 95.3 and 8.2, 1999: 110.9 
    and 15.2, 2000: 142.7 and 30.3, 2001: 149.4 and 23.3, 2002: 146.8 and 6.1, 2003: 156.8 and 3.6, 2004: 177.6 and 7.2, 2005: 154.6 and 5.1.
  6. In millions of Bahamian dollars, operational and capital investment expenditure for the industry, including both domestic and offshore sectors amounted to - 1995: 218.1 and 20.1, 1996: 249.8 and 25.5, 1997: 275.5 and 21.1, 1998: 275.8 and 17.5, 1999: 314.1 and 31.1, 2000: 350.6 and 44.5, 2001: 381.3 and 48.7, 2002: 376.9 and 19.4, 2003: 382.1 and 15.4, 2004: 424.1 and 34.8, 2005: 408.3 and 17.6.

In the information that follows, real economic growth is measured according to changes in Real GDP. Note that growth rates from 1996 to 2006 are taken from the Department of Statistics National Accounts Report 2006, whereas 2007 and 2008 figures are projected from the IMF World Economic Outlook for April 2007 (Table 6).


Year Real GDP
1996 4.20%
1997 5.00%
1998 6.80%
1999 4.00%
2000 1.90%
2001 0.80%
2002 2.3%
2003 1.00%
2004 1.30%
2005 2.50%
2006 3.40%
2007 4.50%
2008 4.00%


Gross Domestic Product (GDP) refers to the total value of final goods and services produced in an economy, normally over the period of one year. It is measured in either current prices or constant prices. GDP at current prices or Nominal GDP, as it is called, means that the total value of final goods and services is measured at the prevailing price level in that period. Correspondingly, GDP at constant prices or Real GDP, means that the total value of final goods and services is measured at a price level from which the element of inflation would have been removed. This action enables the determination that an increase(decrease) in an economy's production from year-to-year would have been due to a direct increase(decrease) in production, and not influenced by price increases(decreases). On this basis, economic growth is measured as the percent change in Real GDP, since this constant price measurement, in effect, indicates the 'real' or actual production in an economy.