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Supervisor and Regulator of the Financial System

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.