Expanded Role for Central Bank of The Bahamas

The Prime Minister of The Bahamas has announced that the Governor of the Central Bank will have his powers expanded in terms of deciding which companies transact trust and banking business in The Bahamas. That is, the Governor will have the authority to deny bank and trust company licenses based on the determination of the applicant being “fit and proper”. Current powers of office allow the Governor to refuse a license if it is determined that it is not in the public’s best interest to do so.

Efforts are underway to recruit additional persons to join the supervision division of the Central Bank to assist in the supervision and regulation of financial institutions. And, the government plans to legislate the duties of the Central Bank as a supervisory authority, and to clearly establish its duty to cooperate with other supervisory authorities around the world. This will permit cross-border supervision as required under the Basle Committee Standards on Bank Supervision — “standards with which The Bahamas wishes to be fully compliant”.

It is expected that the Central Bank will put in place stricter rules governing “managed” banks, ensuring that these cannot exist in The Bahamas unless they are subject to the supervisory oversight of some institution, be it in The Bahamas or their home country.