The Central Bank of The Bahamas has implemented an electronic interbank payment and settlement system, positioning The Bahamas, it says, *”.. closer towards its goal of modernising the domestic payment infrastructure.”*
The Bahamas Interbank Settlement System (BISS) is a real time gross settlement system, owned and operated by the Central Bank. The seven Clearing Banks in The Bahamas all participated in the system’s development, and are considered BISS “members”.
A Payment System Modernization Initiative (PSMI) was introduced in 1999, with the objectives of:
. bringing the domestic system into compliance with international best practices
. mitigating risk inherent in payment systems
. increasing the efficiency of payment services
. providing an infrastructure that can support the growth of new products and services and satisfy the business needs of all sectors of the economy
A National Payment Council, comprising representatives of the Central Bank and the participating clearing banks, has been charged with overseeing the development of the national payment system.
The BISS enables participating clearing banks to settle B$ payments electronically, on a transaction by transaction basis in real time – among each other and between themselves and the Central Bank. Funds transferred through the BISS are *”immediate, final and irrevocable”*, in line with generally accepted principles for safe and efficient national payment systems.
A release from the Central Bank indicates that in the near future the BISS will also handle Delivery versus Payment (DvP) for securities trades – ensuring that the transfer of title to the security (delivery) occurs simultaneously with the transfer of the underlying financial consideration (payment).
Phase II of the PSMI will see the establishment of an Automated Clearing House (ACH). Targeted for the first quarter of 2005, the ACH will introduce a full range of facilities, including direct debit and credit services and interoperability of domestic ATMs.
At the launch of the system, Sen. The Hon. James Smith, Minister of State in the Ministry of Finance, commented on risk mitigation. He said, *”Payment systems need to be designed and operated in ways that are safe and efficient to inspire confidence. The BISS provides a safe, enabling environment for the domestic payment system.”*