No.38 of 2000

AN ACT TO MAKE FRESH PROVISIONS TO REGULATE

BANKS AND TRUST COMPANIES WITHIN THE BAHAMAS;

AND FOR CONNECTED PURPOSES

[Date of Assent - 29

Enacted by the Parliament of The Bahamas

Short

th December, 2000]1. (1) This Act may be cited as the Banks and

title

Trust Companies Regulation Act, 2000.

and com-

(2) This Act shall come into operation on such

mencement.

Gazette appoint.

day as the Minister may, by notice published in the

Interpre-

2. In this Act -

tation.

bank or trust company under the provisions of

section 4 of this Act;

“bank” means any person carrying on banking

business;

“banking business” means the business of accepting

deposits of money which may be withdrawn or

repaid on demand or after a fixed period or

after notice and employing those deposits in

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whole or in part by lending or otherwise

investing them for the account and at the risk

of the person accepting them; and “banker”

shall be construed accordingly;

“Board of Directors” means the Board of Directors of

the Central Bank provided for by subsection

(4) of section 3 of the Central Bank of

the Bahamas Act, 2000;

“Central Bank” means the Central Bank of The Bahamas

established pursuant to section 3 of the

Central Bank of The Bahamas Act, 2000;

“company” means a company incorporated either under

the laws of The Bahamas or under the laws of

any other country or place;

“Governor” means the the person appointed as

Governor under paragraph 1 of the Schedule to

the Central Bank of The Bahamas Act, 2000;

“Inspector” means the office of Inspector of Banks

and Trust Companies established under section 9;

“licence” means a licence granted under section 4 or

deemed to be so granted in accordance with that

section;

“licensee” means any person holding a licence under

the provisions of this Act and for the purposes

of this Act “licensee” includes the branches or

subsidiaries of a licensee operating outside of

The Bahamas;

“Minister” means the Minister of Finance;

“Supervisory Authority” in relation to a country or

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territory outside The Bahamas means a foreign

entity charged with the responsibility of

conducting consolidated supervision of banking

and trust business by organisations licensed

in its home country;

“trust business” means the business of acting as

trustee, executor or administrator;

“trust company” means any company carrying on trust

business.

“authorised agent” means a person designated by a

Licence

3. (1) No banking business shall be carried on

required to

from within The Bahamas whether or not such business is

carry on

carried on in The Bahamas except by a person who is in

banking

possession of a valid licence granted by the Governor

business

authorising him to carry on such business.

or trust

(2) No trust company shall carry on trust

business.

business is carried on in The Bahamas unless it is in

possession of a valid licence granted by the Governor

authorising it to carrying on such business.

(3) Every person who contravenes the provisions

of this section shall be guilty of an offence and shall

be liable on summary conviction to a fine not exceeding

one hundred thousand dollars or to imprisonment for a

term not exceeding five years or to both such fine and

imprisonment and in the case of a continuing offence to

a fine not exceeding two thousand five hundred dollars

for each day during which the offence continues.

business from within The Bahamas whether or not such

Application

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4. (1) Any person desirous of carrying on banking

shall be

business and any company desirous of carrying on trust

made to the

business from within The Bahamas shall make application

Governor.

(2) Every application made pursuant to

subsection (1) shall be in writing and shall contain such

information and particulars and shall be accompanied by

such references as may be prescribed and the Governor

shall consider the following factors -

(a) that the applicant is a fit and proper

person or company to carry on banking

business or trust business, as the

case may be;

(b) the nature and sufficiency of the

financial resources of the applicant

to provide continuing financial

support for the bank or trust company,

as the case may be;

(c) the soundness and feasibility of the

business plan;

(d) the business record and experience of

the applicant;

(e) whether those who will operate the

bank or trust company will do so

responsibly and whether such persons

have the character, competence and

experience for operating a bank or

trust company, as the case may be; and

(f) the best interests of the financial

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system in The Bahamas,

and, if satisfied, may grant a licence to such person or

company subject to such terms and conditions, if any, as

the Governor may deem necessary:

Provided that the Governor shall in every

case in which application is made pursuant to subsection

(1) advise the Minister of his decision to either grant

or refuse the grant of such licence.

(3) Whenever he considers it to be in the

public interest, the Governor may refuse to grant a

licence.

(4) A licence shall not be granted to any bank

or trust company having its head office or its registered

office outside The Bahamas unless -

(a) such bank or trust company designates

and notifies to the Governor-

(i) a principal office in The

Bahamas,

(ii) by name one of its officers

who is to be the bank’s or

trust company’s authorised

agent in The Bahamas, and

(iii) by name another of its

officers who in the absence

or inability of the officer

named under sub-paragraph

(ii) is to be the bank’s

or trust company’s

authorised agent in The

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Bahamas;

(b) the Governor is satisfied that the

bank or trust company is subject to

adequate consolidated supervision by

the Supervisory Authority and that the

Supervisory Authority makes no

objection to the establishment of the

branch or subsidiary in The Bahamas;

(c) the Supervisory Authority is permitted

to examine, wherever they are kept,

the books of the bank or trust

company;

(d) there are no constraints on internal

and external audits imposed by the

Supervisory Authority;

(e) the Supervisory Authority is informed

where the bank or trust company will

be managed;

(f) the Supervisory Authority has agreed

to inform the Governor as soon as

reasonably possible of any

circumstances that arise which may

seriously jeopardise the interests of

creditors of the bank or trust

company.

(5) It shall be a condition of every licence

granted to a bank or trust company to which subsection

(4) applies, that the bank or trust company shall

forthwith notify the Governor in writing of any change

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of -

(a) its principal office in The Bahamas;

or

(b) either or both of the officers

designated pursuant to paragraph (b)

or (c) of subsection (4).

(6) In respect of a licence granted under

subsection (2), the Governor may at any time -

(a) make the licence subject to such

conditions or limitations that are

consistent with this Act and that

relate to the business of the bank or

trust company as the Governor

considers necessary;

(b) amend or revoke any authorisation

contained in the licence or any

condition or limitation to which the

licence is subject,

provided that before taking any action under paragraph (a)

or (b) the Governor shall provide the bank or trust

company with an opportunity to make representation

regarding any proposed action.

to the Governor for the grant of a licence.

Approval

5. A licensee incorporated or registered in

of

The Bahamas shall not without the prior written approval

Governor.

subsidiary, branch, agency or representative office.

of the Governor establish, outside of The Bahamas, a

Shares,

6. (1) No shares in a company or certificates of

etc., not

deposit or any other securities of such company which is

to be

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a licensee under this Act shall be issued and no

issued or

issued shares shall be transferred or disposed of in any

transferred

manner without the prior approval of the Governor:

without

Provided that the Governor may exempt any

approval.

provision of this section subject to such terms and

conditions if any as the Governor may deem necessary.

(2) All dividends of the shareholders of a bank

or trust company shall be paid out of the profits and not

out of the subscribed capital of the bank or trust

company.

licensee or group or class of licensees from the

Use of

7. (1) Except with the approval of the Governor no

the word

person, other than a licensee acting under and in

“bank”,

accordance with the terms of his licence, shall -

etc.,

“bank”, “trust”, “trust company”,

“trust corporation”, “savings” or

“savings and loan” or any of their

derivatives either in English or in

any other language, in the description

or title under which such person is

carrying on business from within The

Bahamas whether or not such business

is carried on in The Bahamas;

(b) make, or continue to make, whether

directly or indirectly, any

representation in any bill-head,

letter, letter-head, circular, paper,

notice or advertisement or by any

other means whatsoever, whether

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similar to the foregoing or not, that

such person is carrying on banking

business or trust business or is

authorised by the law of The Bahamas

to carry on such respective business;

(c) in any manner whatsoever, solicit or

receive deposits from the public.

(2) Except with the approval of the Governor -

(a) the Registrar General shall not

register a company; and

(b) no company if already registered

immediately before the twenty fifth

day of November, 1968, shall be

entitled to remain registered on or

after that date,

with a name which contains the words “bank”, “trust”,

“trust company”, “trust corporation”, “savings” or

“savings and loan” or any of their derivatives either in

English or in any other language.

(3) Before giving his approval under subsection

(1) or subsection (2) the Governor may require of any

person such references and such other information and

particulars as may be prescribed.

(4) Whenever he considers it to be in the

public interest the Governor may withdraw any approval

given under subsection (1).

(5) The Governor may refuse to grant a licence

to a bank or a trust company, or if such bank or trust

company is already in possession of a licence, he may

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revoke such licence, if in his opinion such bank or trust

company is carrying on or intending to carry on banking

or trust business, as the case may be, under a name

which -

(a) is identical with that of any company,

firm or business house whether within

The Bahamas or not or which so nearly

resembles that name as to be

calculated to deceive;

(b) is calculated to suggest, falsely, the

patronage of or connection with some

person or authority whether within The

Bahamas or not; or

(c) is calculated to suggest, falsely,

that such bank or trust company has a

special status in relation to or

derived from the Government of The

Bahamas or has the official backing of

or acts on behalf of the said

Government or of any department or

official thereof or is recognized in

The Bahamas as a national or central

bank or trust company.

(6) Every person who contravenes the provisions

of this section shall be guilty of an offence and shall

be liable on summary conviction to a fine not exceeding

fifty thousand dollars or to a term of imprisonment not

exceeding one year or to both such fine and imprisonment

and in the case of a continuing offence to a fine not

exceeding one thousand dollars for each day during which

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the offence continues.

(7) Where it appears to the Governor -

(a) that a company has contravened any

prohibition contained in subsection

(1), and that no other effective means

exists of dealing with the company in

relation to the contravention; or

(b) that a company is disentitled to

remain registered by reason of being

in breach of paragraph (b) of

subsection (2),

then in either such case he may direct the Registrar

General to give notice in writing to the company

requiring it to show cause within thirty days why it

should not be struck off the register of companies; and

the Registrar General shall serve such notice

accordingly, specifying the contravention or breach

complained of, by causing the same to be delivered

personally or sent by prepaid registered post to the

secretary of the company at its registered office; and in

the case of a notice sent by post it shall be deemed to

have been served on the fifth day after the posting of

the registered envelope or packet containing the same.

(8) If any company fails within thirty days of

the service of a notice under the provisions of subsection

(7) to show cause why it should not be struck off

the register or to satisfy the Governor that the

contravention or breach complained of has been

discontinued and will not be repeated, then the Governor

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may in writing direct the Registrar General to strike the

company off the register; and the Registrar General shall

act accordingly and thereupon the company shall be

dissolved.

(9) Upon the removal of a company pursuant

to this section the provisions of section 281(4) to 283

(inclusive) of the Companies Act, 1992 shall have effect

in relation to such company as they have effect in

relation to any company removed from the register

pursuant to that Act.

(a) use or continue to use the words

Yearly

8. (1) Every licensee shall, within four months of

statements

the end of its financial year, publish in the Gazette a

to be

true and full yearly statement of its accounts and the

published.

is properly drawn up so as to exhibit a true and correct

view of the state of the licensee’s affairs as shown by

the books of the licensee, and the auditor of the

licensee shall have the right of access at all times to

the books, accounts and vouchers of the licensee;

provided that the Governor may, if he sees fit, exempt

any licensee from the provisions of this section.

(2) Such statement shall be signed by the

manager or by such other person or officer of the

licensee as may from time to time be authorised by the

licensee to sign such statement on behalf of the

licensee; and the correctness thereof shall be declared

to in such manner and by such persons as the Governor may

direct.

(3) Such statements shall be in such form and

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contain such particulars as the Governor may from time to

time direct.

auditor of the licensee shall certify that such statement

Governor

8A. A licensee shall from time to time, if

may call

required by the Governor, furnish to the Governor a

for further

special return and such further information as the

inform-

Governor may reasonably see fit to call for.

mation.

Failure

8B. If any licensee -

to comply

(a) fails to comply with the requirements

with the

of section 8 within a period of four

require-

months of the end of its financial

ments of

year; or

section 8.

of section 8A for forty-two days after

the date appointed by the Governor

under section 8A for so doing, the

licensee or person so in default shall

be liable to a penalty of two hundred

and fifty dollars for every day of

such defaults:

Provided that the Governor may extend the

time for sending such return for such further period not

exceeding sixty days as he thinks expedient.

(b) fails to comply with the requirements

The

8C. The Governor, in relation to a licensee

Governor

which is or appears to become unable to meets its

may require

obligation or which in the opinion of the Governor is

financial

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carrying on business in a manner detrimental to the

statement,

public’s interest or to the interest of creditors or

etc. of

depositors of such licensee, may by instrument in writing

licensee.

to supply with such reasonable time as may be specified

in the instrument -

(a) the financial statement of that

licensee as of a date determined by

the Governor audited by an auditor who

shall be a chartered accountant or a

certified public accountant approved

of by the Governor; and

(b) such other information relating to the

licensee as may be so specified, and

any person who contravenes the

requirements of such an instrument or

who in response to such an instrument

knowingly or wilfully supplies false

information to the Governor shall be

guilty of an offence and shall be

liable on summary conviction to a fine

not exceeding one hundred thousand

dollars or to imprisonment for a term

not exceeding two years or both such

fine and imprisonment.

require the manager or authorised agent of such licensee

Appoint-

8D. The appointment of the auditors of a

ment of

licensee shall be subject to the approval of the

auditor.

Provided that the Governor may at any time

withdraw such approval and require the replacement of an

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auditor, by notice in writing delivered to the usual

place of business of the auditor and licensee.

Governor:

Power

9. (1) There is hereby established within the

and duties

Central Bank of The Bahamas the Office of Inspector of

of the

Banks and Trust Companies and functions of that office

Inspector.

considers suitable for the purpose of performing the

powers and duties assigned to such Inspector under this

Act.

(2) It shall be the duty of the Inspector -

(a) to maintain a general review of bank

and trust company practice in The

Bahamas;

(b) whenever he thinks fit and when

required by the Governor to conduct

on-site examinations and off-site

supervision of the business of the

licensee for the purpose of satisfying

himself that the provisions of this

Act or the Financial Transactions

Reporting Act, 2000 are being complied

with, that the licensee is in sound

financial position and, after the

conclusion of each examination or

supervision, to report to the

Governor, or in such cases where the

Inspector is unable to conduct such

examination or supervision, to appoint

an auditor, at the expense of the

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licensee, to conduct such examination

or supervision and to report thereon

to the Governor; and the Governor may

assess charges to recover the cost of

such examination or supervision;

(c) to examine and to report on the

several returns delivered to the

Governor pursuant to section 8 of this

Act;

(d) to examine and make recommendations to

the Governor with respect to

applications for licences;

(e) to examine, by way of receipt of

regular returns or in such other

manner as he thinks necessary the

affairs or business of any licensee

carrying on business in or from within

The Bahamas for the purpose of

satisfying himself that the Act is

being complied with and that the

licensee is in sound financial

position;

(f) to inspect and supervise banks and

trust companies in accordance with the

Rules for Inspection and Supervision

set out in the First Schedule.

(3) In the performance of his functions under

this Act and subject to the provisions of section 15, the

Inspector shall be entitled at all reasonable times -

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(a) to have access to such books, records,

vouchers, documents, cash and

securities of any licensee;

(b) to call upon the manager or any

officer designated by the manager of

any licensee for such information or

explanation;

(c) to call upon the auditors of any

licensee for such auditor’s reports,

working papers, information or

explanation;

(d) to require that the auditor of a bank

report to the Inspector on the extent

of the procedures of the auditor in the

examination of the annual financial

statements and may require that the

auditors enlarge the scope of that

examination or direct that any other

particular procedure be performed in

any particular case;

(e) to require that the auditor make a

particular examination relating to the

adequacy of the procedures adopted by

the bank for the safety of its

creditors and shareholders, or any

other examination as considered

necessary by the Inspector,

as the Inspector may reasonably require for the purpose

of enabling him to perform his functions under this Act.

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(4) The Inspector with the approval of the

Governor may in writing authorise any other person to

assist the Inspector in the performance of his functions

under this Act.

(5) No duty of confidentiality to which an

auditor of a licensee may be subject shall be regarded as

having been breached by reason of his communicating in

good faith to the Inspector, pursuant to paragraphs (a),

(b) and (c) of subsection (3), any information or opinion

which is relevant to the Inspector’s functions and

responsibilities under this Act.

(6) Where any person -

(a) fails to comply with any requirement

made by the Inspector, pursuant to

subsection (3), within the period

determined by the Inspector or within

such further period as the Inspector

may determine, it shall be presumed,

in the absence of satisfactory

evidence being furnished by the

licensee justifying such a failure to

comply with such requirement, that the

licensee concerned has been carrying

on business in contravention of the

terms of its licence with effect from

the date of such failure;

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(b) knowingly or intentionally supplies

false or misleading information to the

Inspector or any person authorised to

assist the Inspector;

(c) as an auditor of a licensee in the

performance of an audit, grossly

violates the duties of such auditor as

set out in subsection (1) of section

shall be performed by such person as the Governor

Ch. 285.

audit report or omits essential facts

or fails to request

pertinent information from the

licensee or fails to report his

findings to the Inspector; or

(d) perpetrates a fraud or a crime which

involves the making of

misrepresentations in advertising or

otherwise or using the domicile of The

Bahamas for such purposes,

he shall be guilty of an offence and shall be liable on

summary conviction to a fine not exceeding one hundred

thousand dollars or to a term of imprisonment not

exceeding five years or to both such fine and

imprisonment and in the case of a continuing offence to

a fine not exceeding two thousand dollars for each day

during which the offence continues.

(7) No civil or criminal liability shall attach

to the Inspector, or any person duly authorized by the

Inspector under subsection (4), for an act done in good

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faith in the discharge or purported discharge of such

person’s functions under this Act.

(8) The Board of Directors may indemnify the

Governor and the Governor may indemnify the Inspector or

any person duly authorised by the Inspector under

subsection (4), against the cost of defending their

actions while so discharging their functions.

8; or makes untrue statements in an

Inspection

10. (1) A Supervisory Authority which is

by foreign

responsible for regulating a bank or trust company with

supervisory

a branch or subsidiary incorporated inside The Bahamas

authority.

Inspector, conduct an inspection, under conditions of

confidentiality, and subject to the conditions set out in

subsection (2), solely for purposes of consolidated

supervision, of the books and accounts of any branch or

subsidiary of that bank or trust company in The Bahamas

and may gather only such information as is necessary for

the performance of consolidated supervision of any branch

or subsidiary of that bank or trust company in The

Bahamas, being information as to whether such branch or

subsidiary of that bank or trust company as a constituent

of the banking group -

(a) is adequately organized;

(b) has adequate risk management systems

and appropriately identifies, limits

and monitors risks inherent in that

bank’s business activities;

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(c) is managed by persons who are fit and

proper for the conduct of business

activities;

(d) complies with capital-adequacy and

risk-diversification requirements on

a consolidated basis; and

(e) correctly complies with its reporting

duties to the Supervisory Authority.

(2) Any branch or subsidiary of a bank or trust

company to which subsection (1) applies shall, subject to

the conditions set out below, permit the Supervisory

Authority at all reasonable times, to conduct its

inspection under subsection (1) where -

(a) the Supervisory Authority has obtained

the prior written approval of the

Inspector;

(b) the Supervisory Authority is

prohibited by its domestic laws from

divulging information obtained in the

course of the inspection to any other

person or where the Supervisory

authority has given such written

undertaking, as the Inspector may

require, as to the confidentiality of

the information obtained;

(c) the Supervisory Authority has given to

the Inspector a written undertaking to

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comply with the provisions of this Act

and any condition imposed by the

Inspector under this section;

(d) the Supervisory Authority has given to

the Inspector a written undertaking to

use the information obtained

exclusively for the purpose of

consolidated supervision;

(e) the Supervisory Authority has given to

the Inspector a written undertaking

that it shall not transmit information

obtained during the course of its

inspection to any other authorities or

bodies without the written consent of

the Inspector;

(f) the Supervisory Authority agrees to

subsequently report to the Inspector

on the general results of the

inspection.

(3) Where information concerning criminal or

penal matters comes to the attention of the Supervisory

Authority in the course of an inspection, and the

Supervisory Authority wishes to convey such information

to any person or entity in the Supervisory Authority’s

home country, or elsewhere, the Supervisory Authority

shall not, without first obtaining the consent in writing

of the Inspector, divulge such information to any person

or entity in the home country of the Supervisory

Authority or elsewhere:

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Provided that in all cases, the Supervisory

Authority shall inform the Inspector of any information

concerning criminal or penal matters which come to the

Supervisory Authority’s attention in the course of an

inspection.

(4) The Supervisory Authority, in carrying out

an inspection under subsection (1), shall not have access

to information relating to the assets under management or

deposit operations of individual customers of a licensee:

Provided however, that where the

Supervisory Authority during an inspection within The

Bahamas wishes to gain access to information, which

directly or indirectly relates to assets under management

or deposit operations of any individual customer for the

purpose of assessing any risks and addressing any

specific supervisory concerns, the Supervisory Authority

shall inform the Inspector and the Inspector shall gather

the information himself and shall, upon being satisfied

that the information meets the requirements set out in

this subsection, transmit it to the Supervisory Authority

requesting it.

(5) The Inspector or any authorized agent of

the Inspector may, whenever the Inspector thinks fit or

upon the request of a licensee accompany a Supervisory

Authority during its inspection within The Bahamas of a

licensee, pursuant to this section.

may upon written notification to and approval by the

Appointed

11. (1) A Supervisory Authority may, with the prior

body to

written approval of the Inspector, appoint another body

conduct

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to conduct the inspection referred to in subsection (1)

inspection.

section and subsections (1), (2), (3), (4) and (5) of

section 10 shall apply to the appointed body in the same

way as they apply to the Supervisory Authority.

(2) The Inspector may, at any time after

granting approval for an inspection under this section

require the Supervisory Authority to comply with such

other conditions as the Inspector may determine.

of section 10 and in such event the provisions of this

Confiden-

12. (1) Any person who has, by any means, access to

tiality

a report or other information or document produced by

of reports

the Inspector or a Supervisory Authority upon

of Inspector

examination or inspection of a licensee under section

and Super-

9 or 10, by reason of his acting in any of the following

visory

capacities -

Authority.

of any licensee or former licensee;

(b) counsel and attorney, consultant or

auditor of The Central Bank or as an

employee or agent of such counsel and

attorney, consultant or auditor;

(c) counsel and attorney, consultant,

auditor, accountant, receiver or

liquidator of any licensee or former

licensee or as an employee or agent of

such counsel and attorney, consultant,

auditor, accountant, receiver or

liquidator;

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(d) auditor of any customer of any

licensee or former licensee or as an

employee or agent of such auditor,

shall not communicate the report or other information or

document or any part thereof to any person other than a

director, officer, employee or agent of the licensee

without the prior written permission of the Inspector.

(2) The Inspector may grant permission under

subsection (1) subject to such conditions as may be

determined by the Inspector.

(3) If any person receives a report or any part

of a report or other information or document referred to

in subsection (1), knowing or having reasonable grounds

to believe, that such report or other information or

document or part thereof was communicated to him in

contravention of this section, that person shall be

guilty of an offence unless he proves -

(a) that the report or other information

or document or part thereof, as the

case may be, was communicated to him

contrary to his intention; and

(b) where the communication was effected

in any written form, that he has

conveyed or has taken reasonable steps

to convey the report or other

information or document or part

thereof, as the case may be, to the

Inspector.

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(4) Any person guilty of an offence under this

section shall be liable on summary conviction to a fine

not exceeding twenty-five thousand dollars or to

imprisonment for a term not exceeding two years or to

both such fine and imprisonment.

(a) director, officer, employee or agent

Rules for

13. The rules set out in the First Schedule

inspection

shall be observed by the Inspector for the purpose of

and super-

supervising banks and trust companies and their

vision of

operations so as to ensure the preservation of the

banks.

soundness and efficiency of the banking system.

First

Schedule.

Powers

14. (1) The Governor may -

of the

(a) by order, revoke the licence of a

Governor.

(i) if, in the opinion of the

Governor, the licensee is

carrying on its business in

a manner detrimental to the

public interest or to the

interests of its depositors

or other creditors or is

either in The Bahamas or

elsewhere contravening the

provisions of this or any

other Act or of any order or

regulations made under this

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Act, or any term or

condition subject to which

the licence was issued,

(ii) if the licensee has ceased

to carry on banking business

or trust business, or

(iii) if the licensee becomes

bankrupt or goes into

liquidation or is wound up

or otherwise dissolved,

and he shall subsequently advise the

Minister of his decision;

(b) apply to the Supreme Court for an

order compelling the licensee to

comply with the direction, cease the

contravention or to do anything

required to be done where the

licensee-

(i) is contravening or has

failed to comply with a

direction of the Governor,

(ii) is contravening the Act, or

(iii) has omitted to do anything

under the Act that is

required to be done by the

bank or trust company;

(c) impose, amend or vary conditions upon

the licence;

-28-

(d) require the substitution of any

director or officer of the licensee;

(e) at the expense of the licensee,

appoint a person to advise the

licensee on the proper conduct of its

affairs and to report to the Governor

thereon within three months of the

date of his appointment;

(f) at the expense of the licensee,

appoint a receiver to assume control

of the licensee’s affairs in the

interest of creditors who will have

all the powers of a receiver under the

licensee -

18 of 1992.

(g) require such action to be taken by the

licensee as the Governor considers

necessary.

(2) Whenever the Governor is of the opinion

that any action under subsection (1)(a)(i) and (b)

should be taken against a licensee, he may forthwith

suspend the licence of such licensee and before taking

such action the Governor shall give that licensee notice

in writing of his intention so to do setting out in such

notice the grounds on which he proposes to act and shall

afford the licensee within such time as may be specified

therein, not being less than seven days, an opportunity

of submitting to him a written statement of objection to

such action, and thereafter the Governor shall advise the

licensee of his decision.

-29-

(3) Whenever the Governor shall suspend a

licence under subsection (2) he may cause notice of such

suspension to be published in the Gazette.

(4) Any suspension of a licence under

subsection (2) shall be for a period of ninety days, or

until the Governor takes action under subsection

(1)(a)(i) or (b) or until the Governor notifies the

licensee that the suspension is removed, whichever period

is the shorter.

(5) Where the Governor suspends or revokes a

licence under this section, he may apply to the Supreme

Court for an order that the licensee be forthwith wound

up by the court in which case the provisions of the

Companies Act, 1992 relating to the winding up of a

company by the court shall, mutatis mutandis, apply.

(6) The Governor may, in any case in which a

licensee or person who has at any time been a licensee is

being wound up voluntarily, apply to the Supreme Court if

he considers that the winding up is not being conducted

in the best interests of its depositors, the

beneficiaries of any trust or other creditors, and the

court shall make such order as it shall consider

appropriate in the winding up of the licensee.

Companies Act, 1992; and

Preserva-

15. (1) No person who has acquired information in

tion of

his capacity as -

confiden-

(a) director, officer, employee or

tiality.

licensee;

-30-

(b) counsel and attorney, consultant or

auditor of the Central Bank or as an

employee or agent of such counsel

and attorney, consultant or auditor;

(c) counsel and attorney, consultant,

auditor, accountant, receiver or

liquidator of any licensee or former

licensee or as an employee or agent of

such counsel and attorney, consultant,

auditor, accountant, receiver or

liquidator;

(d) auditor of any customer of any

licensee or former licensee or as an

employee or agent of such auditor;

(e) the Inspector under the provisions of

this Act;

(f) a Supervisory Authority or as a

director, officer, employee or agent

of a Supervisory Authority;

shall, without the express or implied consent of the

customer concerned, disclose to any person any such

information relating to the identity, assets,

liabilities, transactions or accounts of a customer of a

licensee or relating to any application by any person

under the provisions of this Act, as the case may be,

except -

(i) for the purpose of the

performance of his duties or

the exercise of his

-31-

functions under this Act, if

any;

(ii) for the purpose of the

performance of his duties

within the scope of his

employment;

(iii) when a licensee is lawfully

required to make disclosure

by any court of competent

jurisdiction within The

Bahamas, or under the

provisions of any law of The

Bahamas;

(iv) for the purpose of enabling

or assisting the Governor to

exercise any functions

conferred upon him by any

written law;

(v) to a person with a view to

the institution of, or for

the purpose of-

(a) criminal proceedings,

(b) disciplinary proceedings,

whether

within or outside The

Bahamas, relating to

the exercise by a

counsel and attorney,

auditor, accountant,

-32-

valuer or actuary of

his professional

duties; or

(c) disciplinary proceedings

relating to

the discharge by a

public officer or a

member or employee of

the Central Bank of his

duties.

(2) Subsection (1) shall not apply in any case

where in accordance with such conditions as the Inspector

may determine, information of such class or classes as

the Inspector may from time to time approve, is

transmitted from a licensee to the head office, a branch

or subsidiary of that licensee outside of The Bahamas,

solely for the purposes of carrying out collation,

synthesis or processing of information on behalf of the

licensee.

(3) In any civil proceedings where information

is likely to be disclosed in relation to a customer’s

bank account, those proceedings may, if the court, of its

own motion or on the application of a party to the

proceedings, so orders, be held in camera and the

information shall be confidential as between the court

and the parties thereto.

(4) No person shall publish the name, address

or photograph of any parties to those civil proceedings

as are referred to in subsection (3) or any information

-33-

likely to lead to the identification of the parties

thereto either during the currency of the proceedings or

after they have been terminated.

(5) The Governor may, subject to the provisions

of section 10(2), provide information on the beneficial

owners, directors, officers and operations of a licensee

(including any report produced by the Inspector pursuant

to any inspection or examination of the licensee) to the

Supervisory Authority which is responsible for regulating

the head office of the licensee for the purpose of

consolidated supervision of the licensee by the

Supervisory Authority.

(6) To facilitate regulatory cooperation within

The Bahamas, the Governor may provide information on the

beneficial owners, directors, officers and operations of

a licensee and any of its affiliates to the domestic

agent of any licensee or former

Second

regulatory authorities specified in the Second Schedule.

Schedule.

(a) prejudice or derogate from the rights

and duties subsisting at common law

between a licensee and its customer;

(b) prevent a licensee from providing upon

a legitimate business request in the

normal course of business a general

credit rating with respect to a

customer; or

(c) prevent the Inspector from sharing

information relating to the identity,

assets, liabilities, transactions or

-34-

accounts of a customer of a licensee

with the Financial Intelligence Unit

where he believes that a suspicious

transaction was not reported as

required under the Financial

Transactions Reporting Act, 2000.

(8) Every person who contravenes the provisions

of subsection (1) shall be guilty of an offence and shall

be liable on summary conviction to a fine not exceeding

twenty-five thousand dollars or to a term of imprisonment

not exceeding two years or to both such fine and

imprisonment.

(7) Nothing contained in this section shall -

Transfer

16.(1) Where a liability exists by reason of a

to Bank

deposit account at a bank in The Bahamas in respect

of

of which no transaction has taken place, or no stateunclaimed

ment of account has been requested or no written

balances.

during a period of seven years -

(a) in the case of a deposit made for a

fixed period, from the day on which

the fixed period terminated, and

(b) in the case of any other deposit, from

the date on which the last customer

initiated transaction occurred or a

statement of account was requested or

acknowledged by the customer,

whichever is the later,

the bank shall pay to the Central Bank an amount equal to

the amount owing by the bank in respect of the account

-35-

and payment accordingly discharges the bank from all

liability in respect of the account.

(2) Where a bank has paid to the Central Bank

an amount in respect of an account, it shall keep all

signature cards, signing authorities and records relating

to the account or microfilm or electronically stored

copies thereof until notified by the Central Bank that

they are no longer required.

(3) In this section “deposit account” includes

deposit accounts of gold and silver bullion.

acknowledgment has been received from the customer,

Charges

17. No bank shall directly or indirectly charge

for account

be by

or receive any sum of money for the establishment, maintotenance or service of an account unless such charge is

agreement.

and the customer.

made by express and specific agreement between the bank

Power of

18. (1) If a Magistrate is satisfied by information

search.

under section 9(4) to assist the Inspector either -

(a) that a licence has been suspended; or

(b) that there is reasonable ground for

suspecting that an offence against

on oath given by the Inspector or by a person authorised

Ch.285.

committed and that evidence of the

commission of the offence is to be

found at any premises specified in the

information or in any vehicle, vessel

or aircraft so specified; or

(c) that any books, records, vouchers,

documents, cash or securities which

-36-

ought to have been produced under

section 9(3) and have not been

produced are to be found at any such

premises or in any such vehicle,

vessel or aircraft,

he may grant a search warrant authorising the Inspector

or such person authorised under section 9(4) or any

police officer together with any other person named in

the warrant and any other police officers, to enter the

premises specified in the information or, as the case may

be, any premises upon which the vehicle, vessel or

aircraft so specified may be, at any time within one

month from the date of the warrant, and to search the

premises or, as the case may be, the vehicle, vessel or

aircraft.

(2) The person authorised by any such warrant

as aforesaid to search any premises or any vehicle,

vessel or aircraft may search every person who is found

in or whom he has reasonable ground to believe to have

recently left or to be about to enter those premises or

that vehicle, vessel or aircraft, as the case may be, and

may seize any books, records, vouchers, documents, cash

or securities found in the premises or in the vehicle,

vessel or aircraft which he has reasonable ground for

believing to be evidence of the commission of any offence

this Act has been or is being

Ch. 285.

records, vouchers, documents, cash or securities found in

the premises or in the vehicle, vessel or aircraft which

-37-

he has reasonable ground for believing ought to have been

produced under section 9(3):

Provided that no female shall, in pursuance

of any warrant issued under this subsection, be searched

except by a female.

(3) Where by virtue of this section a person

has any power to enter any premises he may use such force

as is reasonably necessary for the purpose of exercising

that power.

(4) Every person who shall obstruct the

Inspector or any other person in the exercise of any

powers conferred on him by virtue of this section shall

be guilty of an offence and shall be liable on summary

conviction to a fine not exceeding one thousand dollars

or to imprisonment for a term not exceeding three months

or to both such fine and imprisonment.

against this Act or the Banks Act or any such books,

Attorney-

19. (1) No prosecution in respect of any offence

General’s

committed under this Act shall be instituted except by or

fiat.

(2) Any penalty incurred under this Act shall

be paid to the Central Bank.

with consent of the Attorney-General.

Regula-

20. The Governor may make regulations for all

tions.

(a) to prescribe the information,

particulars and references which may

be prescribed under section 4(1) and

section 7(3);

-38-

(b) to establish fines not exceeding five

thousand dollars for failure to comply

with any regulation;

(c) generally for carrying the purposes or

provisions of this Act into effect.

or any of the following purposes -

No dero-

21. (1) The provisions of this Act shall have

gation.

provisions having the force of law in the Bahamas.

(2) This Act shall not apply to the Post Office

Savings Bank.

effect in addition to and not in derogation of any other

Appeal.

from any decision of the Governor -

(a) revoking a licence under section 4(6),

section 7(5) or section 14;

(b) withdrawing any approval under section

7(4);

(c) requiring a licensee to take certain

steps which the Governor may specify

under section 14.

(2) An appeal against the decision of the

Governor shall be on motion and the appellant within

twenty-one days after the day on which the Governor has

given his decision shall serve on the Attorney-General a

notice in writing signed by the appellant or his counsel

and attorney of his intention to appeal and of the

general ground for his appeal:

Provided that any person aggrieved by the

decision of the Governor may upon notice to the Attorney-

General apply to the Supreme Court for leave to extend

-39-

the time within which the notice of appeal prescribed by

this section may be served, and the Supreme Court upon

the hearing of such application may extend the time

prescribed in this section as it deems fit.

(3) The Attorney-General shall upon receiving

the notice of appeal transmit to the Registrar of the

Supreme Court without delay a copy of the Governor’s

decision and all papers relating to the appeal:

Provided that the Attorney-General shall

not be compelled to disclose any information if he

considers that the public interest would suffer by such

disclosure.

(4) The Registrar shall set the appeal down for

hearing on such day, and shall cause notice of the same

to be published in such manner, as the Supreme Court may

direct.

(5) At the hearing of the appeal the appellant

shall, before going into the case, state all the grounds

of appeal on which he intends to rely and shall not,

unless by leave of the Supreme Court, go into any matters

not raised by such statement.

(6) The Supreme Court may adjourn the hearing

of the appeal and may upon hearing thereof confirm,

reverse, vary or modify the decision of the Governor or

remit the matter with the opinion of the Supreme Court

thereon to the Governor.

(7) An appeal against a decision of the

Governor shall not have the effect of suspending the

execution of such decision.

-40-

22. (1) An appeal shall lie to the Supreme Court

Fees.

23. (1) The provisions of the Third Schedule shall

Second

have effect for the payment of fees in respect of the

Schedule.

shall be payable to the Treasurer.

(2) All fees paid pursuant to subsection (1)

and the Third Schedule shall be placed in the

Consolidated Fund.

(3) The Minister may by regulations vary the

fees prescribed in the Third Schedule, so, however, that

any such regulations which increase the amount of any

fees payable under this Act shall be exempt from the

matters mentioned in that Schedule, and all such fees

Ch.2.

General Clauses Act but instead be subject to affirmative

resolution of both Chambers of Parliament.

(4) In subsection (3) the expression

“affirmative resolution of both Chambers of Parliament”

in relation to regulations means that the regulations are

not to come into operation unless and until affirmed by

a resolution of each of those Chambers.

(5) If any person fails to comply with any

requirement of subsection (1) and the Third Schedule,

he, or, where such person is a company, the company and

every director, manager, secretary or other officer of

the company who knowingly and wilfully authorises or

permits the default, shall on summary conviction be

liable, for every day during which the default continues,

to a fine not exceeding one thousand dollars.

provisions of section 32 of the Interpretation and

Repeal.

Act and the Banks Act are hereby repealed.

-41-

24. The Banks and Trust Companies Regulation

Savings.

exemption granted under the repealed Act which is in

force immediately before the coming into force of this

Act -

(a) shall continue to have effect after

the coming into force of this Act as

if granted under this Act;

(b) in the case of a grant for a specific

period, shall remain in force for so

much of that period as falls after the

coming into force of this Act.

25. Any licence, authority, approval or

FIRST SCHEDULE (Section 13)

Rules for Inspection and Supervision of Banks

1. The Inspector shall -

(a) regularly evaluate the condition,

solvency and liquidity of all licensees;

(b) establish appropriate and prudent

standards for conducting safe and sound

banking and trust business;

(c) set prudent and appropriate capital

adequacy requirements not less than those

established in the Basle Capital Accord

and its Amendments;

-42-

(d) evaluate banks’ policies, practices and

procedures related to the granting of

loans and making of investments and the

on-going management of the loan and

investment portfolios;

(e) ensure that banks have management

information systems that enable

management to identify portfolio

concentration in line with established

limits;

(f) ensure that banks have in place and use

systems that accurately measure, monitor

and adequately control market and other

risks;

(g) ensure that banks establish and adhere to

adequate policies, practices and

procedures for evaluating the quality of

assets and the adequacy of loan-loss

provisions and loan-loss reserves;

(h) ensure that banks have in place internal

controls adequate to the nature and scale

of their operations, and adequate

policies, practices and procedures,

including strict know-your-customer rules

that promote high ethical and

professional standards, and so prevent

the use of the bank for criminal

purposes;

(i) cooperate with inspectors and supervisors

in other jurisdictions to the extent

necessary for the purposes of crossborder

supervision consistent with the

-43-

policy established by the Basle Committee

for cross-border supervision.

2. In this Part -

“Basle Capital Accord” or “Basle Committee” means

the committee of banking supervisory

authorities established by central-bank

Governors of the Group of Ten countries in

1975 and its report.

SECOND SCHEDULE (Section 15(6))

DOMESTIC REGULATORY AUTHORITIES

1. Financial Intelligence Unit.

2. Registrar of Insurance.

3. Registrar of Companies.

4. Securities Commission of The Bahamas.

THIRD SCHEDULE (Section 23)

FEES

1. Subject to the following paragraphs of this

Schedule, the following shall be the fees under this Act, that

is to say -

Matters in respect of Amount of

which fee is payable fee

$

-44-

(a) Appointment of a licensee by the

Controller of Exchange as an

authorised dealer as defined in

paragraph (1) of regulation 44 of

the Exchange Control Regulations 250,000

(b) Continuance in being on the first

day of January in any year as a

person appointed as mentioned in

sub-paragraph (a) of this

paragraph 100,000

(c) Appointment of a licensee as

authorised agent for a beneficial

owner of investment currency or

foreign currency securities

pursuant to the Exchange

Control Regulations 60,000

(d) Continuance in being on the first

day of January in any year as a

person appointed as mentioned in

sub-paragraph(c) of this paragraph 60,000

(e) Grant of licence to carry on

banking business or trust

business or to carry on both

banking business and trust

business without any limitation

on the persons with or for whom

such respective business may be

carried on, where the licensee -

(i) has been declared by

the Controller of

Exchange pursuant to

the Exchange Control

Regulations to be

resident in The

Bahamas; and

-45-

(ii) has not been appointed

as mentioned in

sub-paragraph (a) or

(c)of this paragraph 25,000

(f) Continuance in being on the first

day of January in any year as a

person licensed as mentioned in

sub-paragraph (e) of this

paragraph 25,000

(g) Grant of licence to carry on

banking business or trust

business or to carry on both

banking business and trust

business without any limitation

on the persons with or for whom

such respective business may be

carried on where the licensee -

(i) has been declared by

the Controller of

Exchange pursuant to

the Exchange Control

Regulations not to be

resident in The

Bahamas; and

(ii) has not been appointed

as mentioned in subparagraph

(a) or (c) of

this paragraph 25,000

(h) Continuance in being on the first

day of January in any year as a

person licensed as mentioned in

sub-paragraph(g) of this licence 25,000

(i) Grant of licence to carry on

banking business solely with

person specified in the licence 5,000

-46-

(j) Continuance in being on the first

day of January in any year as a

person licensed as mentioned in

sub-paragraph (i) of this

paragraph 5,000

(k) Grant of licence to carry on

banking business and trust

business solely with or for

persons specified in the licence 5,000

(l) Continuance in being on the first

day of January in any year as a

person licensed as mentioned in

sub-paragraph (k) of this

paragraph 5,000

(m) Grant of licence solely to carry

on the trust business specified

in the licence 2,500

(n) Continuance in being on the first

day of January in any year as a

person licensed as mentioned in

sub-paragraph (m) of this

paragraph 2,500

(o) Grant of any licence not

mentioned in sub-paragraph (e),

(g), (i), (k) or (m) of this

paragraph 1,000

(p) Continuance in being on the first

day of January in any year as a

person licensed as mentioned in

sub-paragraph (o) of this

paragraph 1,000

2. Where any person by reason of falling within a

class mentioned in sub-paragraphs (a) to (p) of paragraph 1 of

this Schedule has paid a fee therein prescribed in respect of

-47-

that class for any year and would, but for provisions of this

paragraph of this Schedule, be required to pay in that year a

further fee or further fees by reason of such person during

that year coming additionally within another such class as

aforesaid, such person shall not be required to pay in respect

of fees under this Act for that year more in total than the

highest fee prescribed in respect of any of the classes within

which such person falls:

Provided that any person in any year falling

within a class mentioned at sub-paragraph (a) or (b) and at

the same time within a class mentioned at sub-paragraph (c) or

(d) of the said paragraph 1 of this Schedule shall, subject to

paragraphs 3 and 4 of this Schedule, be required to pay the

fee prescribed in respect of both such classes for that year.

3. As respects the fees specified at subparagraphs

(b), (d),(f), (h), (j), (l), (n) and (p) of

paragraph 1 of this Schedule -

(a) not more than sixty days grace, to be

calculated from the first day of January in

each year, may be allowed by the Treasurer for

the payment of the fees payable in any year;

and

(b) no such fees shall be payable in any year

where the original appointment or licence to

which such fee relates was made or granted on

or after the first day of September in the

preceding year.

4. Any fee paid by any person in any year pursuant to

subsection (1) of section 308, and paragraph 3 of the Third

Schedule to, the Companies Act shall be deducted from any fees

payable by such person in that year under this Act.

-48-

ARRANGEMENT OF SECTIONS

1. Short title and commencement.

2. Interpretation.

3. Licence required to carry on banking business or trust business.

4. Application shall be made to the Governor.

5. Approval of Governor.

6. Shares, etc., not to be issued or transferred without approval.

7. Use of the word “bank”, etc.

8A. Governor may call for further information.

8B. Failure to comply with the requirements of section 8.

8C. The Governor may require financial statement, etc., of licensee.

8D. Appointment of auditor.

9. Powers and duties of the Inspector.

10. Inspection by foreign supervisory authority.

11. Appointed body to conduct inspection.

12. Confidentiality of reports of Inspectors and Supervisory Authority.

13. Rules for inspection and supervision of banks.

14. Powers of the Governor.

15. Preservation of confidentiality.

16. Transfer to banks of unclaimed balances.

17. Charges for account to be by agreement.

18. Power of search.

19. Attorney-General’s Fiat.

20. Regulations.

21. No derogation.

22. Appeal.

-49-

23. Fees.

24. Repeal.

25. Savings

FIRST SCHEDULE

SECOND SCHEDULE

THIRD SCHEDULE

 

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