No. 37 of 2000

AN ACT TO REPEAL THE CENTRAL BANK OF THE BAHAMAS

ACT AND TO MAKE FRESH PROVISIONS FOR THE

ESTABLISHMENT OF A CENTRAL BANK, ITS

FUNCTIONS AND DUTIES; AND FOR CONNECTED

PURPOSES

[Date of assent - 29

th December, 2000]

Enacted by the Parliament of The Bahamas

PART I

PRELIMINARY

Short-

1. (1) This Act may be cited as the Central Bank of

title

The Bahamas Act, 2000.

and com-

(2) This Act shall come into operation on

mencement.

Gazette, appoint.

such day as the Minister may, by notice published in the

Interpre-

2. In this Act -

tation.

by section 3;

“bank” means a financial institution lawfully carrying on

banking business including the accepting of

deposits of money withdrawable by cheque;

“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deposits of money which may be withdrawn or repaid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 whole or in part by

“Bank” means the Central Bank of The Bahamas established

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lending or otherwise investing them for the account

and at the risk of the person accepting them; and

“banker” shall be construed accordingly;

“Board” means the Board of Directors of the Bank provided

for by subsection (4) of section 3;

“civil and administrative investigations and proceedings”

means proceedings in any court of law in the

jurisdiction of an overseas regulatory authority and

investigations undertaken by the overseas regulatory

authority preliminary to bringing such proceedings;

“coins” means coins of the currency of The Bahamas;

“commercial bank” means a bank licensed to carry on

banking business in The Bahamas;

“company” means a company incorporated under any law in

force whether in The Bahamas or elsewhere;

“director” means a member of the Board;

“financial institution” means an institution carrying on

banking business;

“Governor” means the person appointed as such under

paragraph 1 of the Schedule;

“Minister” means the Minister of Finance;

“notes” means notes of the currency of The Bahamas;

“overseas regulatory authority” means an authority which,

in a country or territory outside The Bahamas,

exercises functions corresponding to -

(a) any functions of the Bank; or

(b) any additional regulatory functions in

relation to companies or financial

services as the Bank may specify by order

including the conduct of civil and

administrative investigations and

proceedings to enforce laws, regulations

and rules administered by that authority;

“public corporation” means a body corporate established

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directly by statute for public purposes;

“regulatory functions” means functions of the Bank, or

functions corresponding to such functions, and any

other similar functions relating to companies or

financial services as may be specified by the Bank;

“regulatory laws” means any one or more of -

Ch. 285.

(a) the Banks Act;

Ch. 287.

Act, 2000;

“securities” means shares, stocks, bonds, debentures or

debenture stock;

“trust business” means the business of acting as trustee

or executor and administrator;

“trust company” means a company carrying on trust

business;

“year” means financial year of the Bank.

(b) the Banks and Trust Companies Regulation

PART II

ESTABLISHMENT AND FUNCTIONS OF THE

BANK

The

3. (1) There shall continue to be a bank, to be

Central

called “the Central Bank of The Bahamas” (in this Act referred

Bank of

to as “the Bank”), having the functions assigned to it by the

The

following provisions of this Act.

Bahamas.

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.

(3) The Bank may sue and be sued in its corporate

(2) The Bank shall be a body corporate having

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name and may for all purposes be described by that name.

(4) There shall be a Board of Directors of the

Bank, who, subject to the provisions of this Act, shall be

responsible for the policy of the Bank and shall manage its

affairs and business.

Schedule.

effect as to the Board of Directors and otherwise in relation

to the Bank.

(5) The provisions of the Schedule shall have

Places of

4. The Bank shall have its principal place of

business,

business in the City of Nassau and may in the Bahamas or

etc.

(a) establish and maintain such branch

offices; and

(b) appoint such agents and correspondents,

as the Bank thinks fit.

elsewhere-

The Bank’s

5. (1) It shall be the duty of the Bank, subject to

functions.

(a) to promote and maintain monetary

stability and credit and balance of

payments conditions conducive to the

orderly development of the economy;

(b) in collaboration with the financial

institutions, to promote and maintain

adequate banking services and high

standards of conduct and management

therein;

(c) to advise the Minister on any matter of a

financial or monetary nature referred to

by him to the Bank for its advice.

(2) The Bank shall, subject to provisions of

subsections (4), (5) and (7) of section 38, have the power to

assist and co-operate with overseas regulatory authorities.

(3) The bank shall, subject as aforesaid, have

power to do anything, whether in The Bahamas or elsewhere,

the provisions of this Act-

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which is calculated to facilitate, or is incidental or

conducive to the discharge of its duty under this section.

PART III

CAPITAL AND RESERVES

Capital

6. (1) The authorised capital of the Bank shall be

of the

three million dollars.

Bank.

capital of the Bank shall be paid from the Consolidated Fund

at such times and in such amounts as the Board, with the

approval of the Minister, may determine.

(2) Any capital required to make up the authorised

General

7. (1) The Bank shall establish and maintain a

Reserve.

section, at the end of each year the net profit of the Bank

shall be credited (after the making of such deductions and

allowances for other reserves and contingencies as the Bank

may think fit) or the net loss incurred by the Bank debited,

as the case may require.

(2) Whenever at the end of any year the amount in

the General Reserve exceeds-

(a) twice the authorised capital of the Bank;

or

(b) fifteen per centum of the demand

liabilities of the Bank,

whichever is greater, then the amount of any such excess shall

be paid over to the Consolidated Fund, unless the Minister

otherwise determines.

General Reserve, to which, subject to the provisions of this

PART IV

CURRENCY

Currency

8. (1) The currency of The Bahamas shall be the notes

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of

and coins issued by the Bank under the provisions of this Act.

The

(2) The unit of the said currency shall be the

Bahamas.

dollar, which shall be divided into one hundred cents.

Parity

9. The parity of the dollar shall be equivalent

of the

to 0.736662 grams of fine gold, so, however, that the

dollar.

the said parity whether in terms of gold or any other

standard.

Minister may, after consultation with the Bank, by order alter

Contracts,

10. Every contract, sale, payment, bill, note or

etc.,

security for money and every transaction, dealing, proceeding,

deemed

matter or thing whatever relating to money or involving the

to be in

payment of, or the liability to pay, money shall be

Bahamian

deemed to be made, executed or entered into in or in relation

currency.

executed or entered into in or in relation to the currency of

some other country.

to the currency of The Bahamas unless it is expressly made,

Sole

11. (1) The Bank shall have the sole right and

right

authority to issue notes and coins throughout The Bahamas.

of Bank

(2) No person other than the Bank shall issue in

to issue

The Bahamas notes or coins of any documents or tokens having

notes

the appearance of notes or coins.

and coins.

subsection (2) shall be guilty of an offence and shall be

liable on conviction thereof 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.

(3) Any person who contravenes the provisions of

Issue,

12. The Bank shall from time to time as

etc., of

circumstances may requirenotes

(a) arrange for the printing of notes and the

and

minting of coins; and

coins.

coins.

(b) issue, re-issue and redeem notes and

Denomina-

13. The Minister may, after consultation with the

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tions and

of

Bank, by order prescribeform(a) the denominations (being multiples or

notes

fractions of a dollar), forms and designs

and

of the notes and coins; and

coins.

such coins, and the amount of tolerance

and the variation which shall be allowed

therein.

(b) the standard weight and composition of

Legal

14. (1) Subject to the provisions of this sectiontender.

(a) notes issued by the Bank shall be legal

tender in The Bahamas at their face value

for the payment of any amount;

(b) coins issued by the Bank shall be legal

tender in The Bahamas at their face value

up to an amount not exceeding one hundred

dollars in the case of coins of a

denomination of not less than one dollar,

and up to an amount not exceeding five

dollars in the case of coins of a lesser

denomination.

(2) All notes and coins lawfully in circulation

immediately before commencement of this section shall be

deemed for all purposes to be notes and coins issued by the

Bank under this Act and to be legal tender until withdrawn

from circulation under the provisions of subsection (3).

(3) The Bank may, on giving not less than one

month’s notice in the Gazette, call in any notes or coins on

payment of the face value thereof, and any such notes or coins

shall, on the expiration of the notice, cease to be legal

tender but, subject to the provisions of section 15, shall be

redeemable by the Bank on demand.

(4) A coin which has been impaired, diminished in

size or lightened otherwise than by fair wear and tear, or

which has been defaced by stamping, engraving or piercing

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shall not be legal tender.

Damaged

15. No person shall be entitled as of right to

currency,

recover from the Bank the value of any lost, stolen, mutilated

etc.

as an act of grace refund to any person the value of any

mutilated or imperfect note or coin.

or imperfect note or coin; but the Bank may in its discretion

Exemption

16. Notes and coins issued by the Bank shall be

from

exempt from the payment of stamp duty.

stamp

duty.

PART V

GOLD, FOREIGN EXCHANGE,

EXTERNAL RESERVE, ETC.

Power

17. Subject to the provisions of this Act, the

of Bank

Bank mayin

(a) buy and sell gold, foreign exchange,

relation

foreign bills of exchange and

to

securities of foreign governments;

foreign

(b) maintain deposits in any foreign

exchange,

financial institution and utilize any

etc.

may think expedient for the due

performance of the functions of the Bank;

(c) make arrangements with any foreign

financial institution to borrow, on such

terms and conditions as the Bank may

think fit, any foreign currency.

such deposit in such manner as the Bank

External

18. (1) The Bank shall at all times maintain a reserve

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reserve.

(a) gold (whether coins or bullion);

(b) notes and coins (other than gold coins);

(c) balances payable on demand held with

financial institutions or agents;

(d) money at call;

(e) bills in the nature of Treasury Bills

maturing within one hundred and eightyfour

days issued by any foreign

government;

(f) marketable securities issued or

guaranteed by any foreign government;

(g) any reserve asset deemed by the Board to

be an internationally recognised reserve

asset:

Provided that at no time shall any

securities held by the Bank pursuant to paragraph (f)

which mature beyond five years constitute more than thirty per

centum in value of the whole of the assets in the reserve of

external assets.

(2) The value of the said reserve shall not at any

time be less than fifty per centum of the value of the

aggregate of the notes and coins in circulation and the demand

liabilities of the Bank.

of external assets consisting of all or any of the following -

PART VI

RELATIONS WITH THE COMMERCIAL BANKS

Statutory

19. (1) Subject to the provisions of this section,

Reserve.

to be called “the Statutory Reserve” of not less than that

percentage of the amount of its deposit liabilities in

Bahamian dollars that is at any time fixed by the Bank under

every commercial bank shall establish and maintain a reserve

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this section.

(2) The Bank may by order fix and from time to

time vary the percentage required by subsection (1):

Provided that -

(a) the percentage fixed as aforesaid shall

not at any time be less than five nor

more than twenty per centum;

(b) different percentages may be so fixed for

different classes of commercial banks;

(c) any such order may require a proportion

of the said reserve (which shall be

specified in the order) to be lodged with

the Bank; and

(d) no such order shall be made increasing

any percentage at the time in force by

more than five per centum in any period

of thirty days.

(3) If any bank contravenes or fails to comply

with any provision of an order made under this section, it

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

conviction thereof to a fine based on the amount of the

deficiency of twice the annual discount rate prevailing at the

time of the contravention or failure to comply for every day

during which the contravention or failure continues.

Liquid

20. (1) Every commercial bank shall so conduct its

assets.

liquid assets are on average not less than that percentage of

the amount of its deposit liabilities in Bahamian dollars that

is at any time fixed by the Bank under this section.

(2) The Bank may by order fix and from time to

time vary the percentage required by subsection (1):

Provided that-

(a) the percentage fixed as aforesaid shall

not at any time be less than ten nor more

business as to ensure, taking one month with another, that its

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than thirty per centum;

(b) different percentages may be so fixed for

different classes of commercial banks;

and

(c) no such order shall be made increasing

any percentage at the time in force by

more than five per centum in any period

of thirty days.

(3) In this section “liquid assets” means -

(a) notes and coins;

(b) any cash balance held at the Bank;

(c) money at call and demand balances at any

financial institution carrying on

business in The Bahamas;

(d) Treasury Bills;

(e) stock of the Government;

(f) any instrument or security of a kind

referred to in subsection (1)(f)(ii)of

section 29;

(g) any freely convertible foreign currency;

(h) money at call and demand balances at any

financial institution abroad being money

at call or demand balances held in freely

convertible foreign currency;

(i) any other asset designated for the

purposes of this subsection by the Bank.

(4) In subsection (3)-

“freely convertible foreign currency” means any foreign

currency which at the time in question is in the

opinion of the Bank a currency that is freely

negotiable and transferable in international

exchange markets at exchange rate margins

consistent with the Articles of Agreement of the

International Monetary Fund;

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“money at call and demand balances at any financial

institution” means money at call and demand

balances held by any commercial bank at any

financial institution less money at call and demand

balances held at that bank by any financial

institution.

(5) If any bank contravenes or fails to comply

with any provision of an order made under this section, it

shall be guilty of an offence and shall be liable on

conviction thereof to a fine based on the amount of the

deficiency of twice the annual discount rate prevailing at

the time of the contravention or failure to comply for every

day during which the contravention or failure continues.

Power

21. (1) Notwithstanding section 39, the Governor may

of

where he is satisfied that a bank has committed an offence

Governor

under section 19 or section 20 order the bank to pay a fine

to fine.

discount rate prevailing at the time of the contravention or

failure to comply for every day during which the contravention

or failure continues.

(2) Where the Governor makes an order under this

section-

(a) the order shall be put in writing;

(b) the order shall specify the offence which

the bank committed and the penalty

imposed by the Governor;

(c) a copy of the order shall be given to the

bank;

(d) once the bank pays the fine as ordered,

the bank shall not be liable to any

further prosecution in respect of the

offence and where any such prosecution is

brought it shall be a good defence for

the bank to prove that the offence with

based on the amount of the deficiency of twice the annual

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which it is charged has been dealt with

under this section; and

(e) the order may be enforced in the same

manner as an order of the court.

Credit

22. (1) Subject to subsection (2), the Bank may by

controls.

(a) the maximum amounts of loans or advances

which commercial banks may have outstanding

at any time or during such

period or periods as may be specified in

the regulations;

(b) the purposes for which, the maturities

for which and the security on which loans

or advances may or may not be made by

commercial banks;

(c) the methods of computation, the minimum

and maximum amounts of interests payable

in respect to loans, advances and

deposits or classes thereof.

(2) Any such regulations-

(a) may be made applicable to all the loans

and advances of any specified commercial

bank or to any specified class or classes

of loans or advances of any specified

class or classes of such banks;

(b) shall not have effect so as to impose in

respect of any loan or advance any limit

or restriction that is more rigorous than

applies to that loan or advance at the

date of the coming into force of the

regulations;

(c) shall fix a date for the coming into

force of the regulations, which shall not

be earlier than thirty days after the

regulations prescribe-

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date of the receipt of written notice by

the relevant bank at its principal place

of business in The Bahamas.

Bank as

23. The Bank may act as banker to any commercial

banker to

bank in The Bahamas and as banker, agent or correspondent to

commercial

any bank abroad.

banks.

Transfer

24. The Bank may accept deposits that are required

of

to be transferred to it in accordance with the Banks and Trust

money.

deposited and pay out money to any person entitled thereto.

Companies Regulation Act, 2000, pay interest on money so

Clearing

25. The Bank may promote the establishment of a

house.

bank clearing system and provide facilities therefor.

PART VII

RELATIONS WITH THE GOVERNMENT

Bank as

26. The Bank may act as banker to the Government

banker to

or any public corporation.

Government.

Bank as

27. The Bank may act generally as agent for the

agent for

Government on such terms and conditions as may be agreed

Government.

consistently with its functions under this Act and, in

particular, the Bank may act as the agent of the Government in

the management of the public debt.

between the Government and the Bank where the Bank can so act

Advances

28. (1) Subject to the provisions of this section, the

to the

Bank may make temporary advances to the Government on such

Govern-

terms and conditions as may be agreed between the Minister and

ment.

(2) Every such advance made by the Bank to the

Government shall be repaid by the Government as soon as

possible.

the Bank.

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(3) The amount of any such advances by the Bank to

the Government which may be outstanding at any one time shall

not exceed ten per centum of the average ordinary revenue of

the Government or ten per centum of the estimated ordinary

revenue of the Government, whichever is the less.

(4) In subsection (3)-

“ordinary revenue” means all income or contributions to

Government revenue not being loans, capital grants

or other receipts of a capital nature;

“average ordinary revenue” means the annual average of

the ordinary revenue of the Government over the

three years (for which accounts have been laid

before Parliament) next before the year in which any

question under the subsection is raised;

“estimated ordinary revenue” means the ordinary revenue,

as estimated in the estimates of the Government as

laid before Parliament, for that year.

PART VIII

GENERAL POWERS OF THE BANK

Powers of

29. (1) Subject to the provisions of this Act, the

the Bank.

(a) open accounts for, accept deposits from,

and collect money for or on account of,

the Government or any commercial bank or

any public corporation;

(b) buy, hold, sell, discount or re-discount-

(i) bills of exchange, promissory

notes or other credit

instruments maturing within one

hundred and eighty days from

the date of their acquisition

Bank may, in the discharge of its functions-

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by the Bank;

(ii) Treasury Bills;

(c) buy, hold and sell securities issued or

guaranteed by the Government, being

securities issued to the public and

maturing within twenty years from the date

of their acquisition by the Bank, but so

that the total amount of any such

securities at any time held by the Bank

which mature beyond five years after their

date of issue (including any such

securities held by the Bank as security

for any loans or advances) shall not

exceed twenty per centum of the demand

liabilities of the Bank;

(d) for the purpose of promoting the

development of a securities market, buy,

hold and sell fixed term and fixed

interest securities of any company, but so

that the total amount of any such

securities at any time held by the Bank

(including any such securities held by the

Bank as security for any loans or

advances)shall not exceed five per centum

of the total liabilities of the Bank;

(e) with the approval of the Minister, buy,

hold and sell securities of any public

corporation or any company, being a

public corporation or company established

for the purpose of developing a securities

market, or financing economic development,

in The Bahamas;

(f) make to any commercial bank or any public

corporation, on such terms and conditions

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as may be determined by the Bank, loans or

advances on the security of any of the

following, that is to say -

(i) gold coins or gold bullion;

(ii) bills of exchange, promissory

notes, other credit

instruments, Treasury Bills or

securities, being bills of

exchange, promissory notes,

credit instruments, Treasury

Bills or securities of any kind

mentioned in paragraph (b) or

(c);

(iii) warehouse warrants or other

documents to goods duly insured

and secured by a letter of

hypothecation from the owner;

or

(iv) securities of any kind

mentioned in paragraph (d) or

(e).

(2) Where any loan or advance is made on the

security of any instrument mentioned in subsection (1)(f)

(ii) -

(a) the loan or advance shall not extend

beyond the maturity date of the instrument

itself or ninety-three days,

whichever is the longer; and

(b) the amount of any such loan or advance

shall not exceed eighty-five per centum of

the market value of the instrument at the

date of its acquisition by the Bank.

(3) Subject to the provisions of this Act, the Bank

may in the discharge of its functions do any other banking

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business incidental to or consequential upon the functions of

the Bank.

Prohibited

30. Except as expressly authorised by this Act,

activi-

the Bank shall notties.

(a) engage in trade or otherwise have a direct

interest in any business undertaking,

except such as the Bank may acquire in the

course of the satisfaction

of debts due to the Bank, but so that it

shall be the duty of the Bank to dispose

as soon as may be of any such interest so

acquired;

(b) grant unsecured loans or advances to any

person; or

(c) acquire any interest in real property

except in so far as the Bank may consider

necessary or expedient for the provision,

or the future provision, of premises for

the conduct of its business or for any

purpose (including use of, or residence

in, any such premises by directors,

officers or servants of the Bank)

incidental to the performance of its

functions.

PART IX

ACCOUNTS, STATEMENTS AND AUDIT

Financial

31. The financial year of the Bank shall end on the

year.

thirty-first day of December.

Publica-

32. (1) The Bank shall, within four months after the

tion of

end of each financial year, cause to be made and transmit

accounts.

19-

to the Minister-

(a) a report of the operations of the Bank

during that year; and

(b) a statement of the accounts of the Bank in

respect of that year certified by the

auditors appointed under subsection (1) of

section 34.

(2) The Bank-

(a) shall, in the preparation of the said

accounts, exclude from its calculations

any profit or loss arising from any

revaluation of any assets or liabilities

of the Bank occasioned by any change in

the value of the currency of The Bahamas

or any foreign currency;

(b) shall credit or debit, as the case may

require, any such profit or loss to an

account (to be established and maintained

by the Bank and called “the Exchange

Equalisation Account”), and

(c) may from time to time transfer to the

General Reserve provided for by section 7

any balance at any time in the said

Account, or any part thereof, as the Bank

thinks fit.

(3) The Minister shall as soon as possible after

their receipt-

(a) cause a copy of the said report and

statement of accounts to be laid before

each House of Parliament; and

(b) cause a copy of the said statement of

accounts to be published in the Gazette.

Publica-

33. The Bank shall on or before the end of every

tion

month prepare and transmit to the Minister and publish in the

of

Gazette a statement of the assets and liabilities of the Bank

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statements.

as at the last working day of the preceding month.

Audit.

annually by auditors appointed by the Board with approval of

the Minister.

(2) Without prejudice to the provisions of

subsection (1), the Minister may at any time require the

Auditor-General to examine and report on the accounts of the

Bank as a whole or any aspect of the operations of the Bank,

and the Bank shall provide the Auditor-General with all

necessary and proper facilities for such an examination.

34. (1) The accounts of the Bank shall be audited

PART X

MISCELLANEOUS

In-

35. (1) The Bank may require any financial institution

formation

or trust company, or any director, officer or servant of such

may be

an institution or company, to supply to the Bank in such form

required

and within such time as the Bank may determine such

from

information as the Bank considers necessary to enable the Bank

financial

to carry out it functions under this Act.

institut-

(2) The Bank may at all reasonable times by notice

ions.

(a) to a person regulated under the

regulatory laws;

(b) to a connected person; or

(c) to a person reasonably believed to have

information relevant to an enquiry by the

Bank,

require him -

(i) to provide specified information or

information of a specified description, or

(ii) to produce specified documents or

documents of a specified description,

in writing given -

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as it may reasonably require in connection with the exercise

by the Bank of functions conferred on it by or under this Act

or the regulatory laws.

(3) Where, in accordance with section 38, the Bank

is satisfied that assistance should be provided in response to

a request by an overseas regulatory authority it may in

writing direct -

(a) a person regulated under the regulatory

laws;

(b) a connected person;

(c) a person that is engaging in an activity

that is subject to regulation under the

regulatory laws; or

(d) a person reasonably believed to have

information relevant to enquiries to

which the request relates,

within a stated time, to -

(i) provide the Bank with specified

information or information of a specified

description with respect to any matter

relevant to the inquiries to which the

request relates,

(ii) produce specified documents or documents

of a specified description relevant to

those inquiries; or

(iii)give to the Bank such assistance in

connection with those inquiries as the

Bank may specify in writing.

(4) Where a person fails to comply with a

requirement under subsection (2) or a direction given under

subsection (3) within three days from the date of the

requirement or direction or such longer period as the Bank may

permit, the Bank may apply to Stipendiary and Circuit

Magistrate for an order requiring the person to comply with

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the requirement or direction.

(5) Where, in connection with a requirement

under subsection (2) or a direction given under subsection

(3), the Bank considers it necessary to examine a person on

oath, the Bank may apply to a Stipendiary and Circuit

Magistrate to have that person examined by the court and to

have the results of that examination sent to the Bank.

(6) The court shall process an application

under subsection (5) within seven days of its receipt and

shall send the result of the examination to the Bank within

fourteen days of the examination.

(7) Where documents are produced pursuant to

subsection (2) or (3) the Bank may take copies of them or

extracts from them.

(8) A person shall not be required under this

section to disclose information or to produce a document which

he would be entitled to refuse to disclose or to produce on

the grounds of legal professional privilege in court

proceedings.

(9) Where a person claims a lien on a document,

its production under this section is without prejudice to his

lien.

(10) In this section “document” includes

information recorded in any form and, in relation to

information recorded otherwise than in legible form, the power

to require its production includes power to require the

production of a copy of it in legible and intelligible form.

(11) For the purposes of this section, any

information or other matter comes to a professional legal

adviser in privileged circumstances if it is communicated or

given to him -

-23-

(a) by, or by a representative of, a client of

his in connection with the giving by the

adviser of legal advice to the client;

(b) by, or by a representative of, a person

seeking legal advice from the adviser; or

(c) by any person -

(i) in contemplation of, or in

connection with, legal

proceedings; and

(ii) for the purpose of those

proceedings.

(12) No information or other matter shall be

treated as coming to a professional legal adviser in

privileged circumstances if it is communicated or given with

a view to furthering any criminal purpose.

(13) For the purposes of subsections (2) and (3) a

person is connected with a person regulated under the

regulatory laws (the “regulated person”) if he is or has at

any relevant time been -

(i) a member of the regulated

person’s group,

(ii) a controller of the regulated

person,

(iii) any other member of a

partnership of which the

regulated person is a member;

or

(iv) a member, officer, manager,

employee or agent of the

regulated person.

(14) A person who without reasonable cause -

(a) fails to comply with a requirement of the

-24-

Bank under subsection (2) or a direction

of the Bank under subsection (3);

(b) with intent to avoid the provisions of

subsections (2) or (3) destroys,

mutilates, defaces, hides or removes a

document; or

(c) wilfully obstructs an inquiry by the Bank

made in accordance with the provisions of

subsection (2) or (3),

shall be guilty of an offence and shall be liable on

conviction thereof to a fine not exceeding one hundred

thousand dollars and if the offence of which he is convicted

is continued after conviction he commits a further offence and

shall be liable to a fine of ten thousand dollars for every

day on which the offence is continued.

(15) Where -

(a) an offence under this section, which has

been committed by a body corporate, is

proved to have been committed with the

consent or connivance of, or to be

attributable to any neglect on the part

of, any director, manager, secretary or

other similar officer of the body

corporate, or any person who was

purporting to act in any such capacity,

he, as well as the body corporate, shall

be guilty of that offence and be liable to

be proceeded against and punished

accordingly;

(b) the affairs of a body corporate are

managed by its members, paragraph (a)

-25-

shall apply in relation to the acts and

defaults of a member in connection with

his functions of management as if he were

a director of the body corporate.

Assist-

36. (1) The Bank may -

ance in

(a) seek the assistance of the Commissioner

obtaining

of Police in the exercise of its powers

information.

(b) authorise a competent person to exercise

any of those powers.

(2) No such assistance shall be sought or

authority granted under subsection (1) except for the purpose

of investigating -

(a) the affairs, or any aspect of the affairs,

of a person specified by the Bank; or

(b) a subject matter specified by the Bank,

being a person who, or a subject matter which, is the subject

of the inquiries being carried out by or on behalf of an

overseas regulatory authority or the Bank.

(3) No person shall be bound to comply with a

requirement imposed by a person exercising powers by virtue of

an authority granted under this section unless he has, if

required, produced evidence of his authority.

(4) Where the Bank seeks assistance or grants an

authority under subsection (1), the assistance or authority

shall be provided or executed in such manner as the Bank may

determine; and where the Bank grants such an authority to a

person, he shall make a report to the Bank in such manner

as the Bank may require, on the exercise of that authority

and the results of exercising it.

under this law; and

Supplying

37. Any person who supplies or is concerned in

-26-

false

supplying to the Minister or the Bank or any other person any

statement.

this Act or any purpose for which any such statement, account,

report or information is lawfully required thereunder, knowing

the same to be false in a material particular, shall be guilty

of an offence and shall be liable on conviction thereof to a

fine not exceeding one hundred thousand dollars or to

imprisonment for a term not exceeding five years and in the

case of a continuing offence to a fine not exceeding two

thousand dollars for each day during which the offence

continues.

statement, account, report or other information pursuant to

Confident-

38. (1) Subject to subsections (2) and (3), whoever is

iality.

and who discloses any information relating to -

(a) the affairs of the Bank;

(b) any application made to the Bank or the

Government under the regulatory laws;

(c) the affairs of a bank or trust company; or

(d) the affairs of a customer, client or

policyholder of, or a company or mutual

fund managed by, a bank or trust company,

that he has acquired in the course of his duties or in the

exercise of the Bank’s functions under this or any other law,

is guilty of an offence and shall be liable on conviction to

a fine not exceeding fifty thousand dollars or to imprisonment

for three years.

(2) Subsection (1)shall not apply to a disclosure-

(a) lawfully required or permitted by any

court of competent jurisdiction within The

Bahamas;

(b) for the purpose of assisting the Bank to

exercise any functions conferred on it by

a director, officer, employee, agent or adviser of the Bank

-27-

this Act, by any other Act or by

regulations made thereunder;

(c) in respect of the affairs of a bank or

trust company or of a customer, client,

policyholder of, or a company or mutual

fund managed by a bank or trust company,

with the authority of the bank or trust

company, customer, client, policyholder,

company or mutual fund, as the case may be

which consent has been voluntarily given;

(d) if the information disclosed is or has

been available to the public from any

other source;

(e) where the information disclosed is in a

manner that does not enable the identity

of any bank or trust company or of any

customer, client, or policyholder of, or

company or mutual fund managed by, a bank

or trust company to which the information

relates to be ascertained;

(f) to a person with a view to the institution

of, or for the purpose of -

(i) criminal proceedings;

(ii) disciplinary proceedings,

whether within or outside The

Bahamas, relating to the

exercise by a counsel and

attorney, auditor, accountant,

valuer or actuary of his

professional duties; or

(iii) disciplinary proceedings

-28-

relating to the discharge by a

public officer, or a member or

employee of the Bank of his

duties; or

(g) for the purposes of any legal proceedings

in connection with -

(i) the winding-up or dissolution

of a bank or trust company; or

(ii) the appointment or duties of a

receiver of a bank or trust

company.

(3) Subject to subsection (7), the Bank may

disclose to an overseas regulatory authority information

necessary to enable that authority to exercise regulatory

functions including the conduct of civil or administrative

investigations and proceedings to enforce laws, regulations

and rules administered by that authority.

(4) In deciding whether or not to exercise its

power under subsection (3), the Bank may take into account -

(a) whether the inquiries relate to the

possible breach of a law or other

requirement which has no close parallel in

The Bahamas or involve the assertion of a

jurisdiction not recognised by The

Bahamas; and

(b) the seriousness of the matter to which the

inquiries relate, the importance to the

inquiries of the information sought in The

Bahamas.

(5) The Bank may decline to exercise its

powers under subsection (3) unless the overseas regulatory

authority undertakes to make such contribution towards the

-29-

costs of the exercise as the Bank considers appropriate.

(6) In subsection (4)(a) “relevant country or

territory” means the country or territory from which the

request for assistance is made.

(7) Nothing in subsection (3) authorises a

disclosure by the Bank unless -

(a) the Bank has satisfied itself that the

intended recipient authority is subject to

adequate legal restrictions on further

disclosures which shall include the

provision of an undertaking of

confidentiality; or

(b) the Bank has been given an undertaking by

the recipient authority not to disclose

the information provided without the

consent of the Bank; and

(c) the Bank is satisfied that the assistance

requested by the overseas regulatory

authority is required for the purposes of

the overseas regulatory authority’s

regulatory functions including the conduct

of civil or administrative investigations

or proceedings to enforce laws

administered by that authority; and

(d) the Bank is satisfied that information

provided following the exercise of its

powers under subsection (3) will not be

used in criminal proceedings against the

person providing the information.

(8) Where in the opinion of the Bank it appears

necessary in relation to any request for assistance received

-30-

from an overseas regulatory authority to invoke the

jurisdiction of a Stipendiary and Circuit Magistrate in the

manner contemplated by subsections (4) and (5) of section 35,

the Bank shall immediately notify the Attorney-General with

particulars of the request, and shall send him copies of all

documents relating to the request, and the Attorney-General

shall be entitled, in a manner analogous to amicus curiae, to

appear or take part in any proceedings in The Bahamas, or in

any appeal from such proceedings, arising directly or

indirectly from any such request.

Offences.

be tried summarily.

39. Every offence against this Act shall

Offences

40. Where an offence under this Act which has been

by

committed by a body corporate is proved to have been committed

corpora-

with the consent or connivance of, or to be attributable to

tions.

other similar officer of the body corporate, or any person who

was purporting to act in any such capacity, he, as well as the

body corporate, shall be guilty of that offence and be liable

to be proceeded against accordingly.

any neglect on the part of, a director, manager, secretary or

Exemption.

41. The Bank shall be exempt from tax under

Ch. 339.

Real Property Tax Act.

PART XI

REPEAL, TRANSITIONAL, ETC

Repeal.

repealed.

42. The Central Bank of The Bahamas Act is hereby

Transitional

43. (1) Upon the day of the coming into operation of

provisions.

(a) every person who immediately before that

day was appointed a director to the Board

of Directors shall be deemed to have been

this Act -

-31-

appointed under this Act and shall

continue to serve in that office for the

unexpired portion of the term remaining to

be served;

(b) all real and personal property and every

right and interest in property that

immediately before that day was vested in

the Bank under the repealed Act, shall, by

force of this section, continue to be

vested in the Bank for the purposes of

this Act subject to any debts, trusts and

liabilities affecting them;

(c) all rights accruing or accrued to the Bank

in respect of any property vested in

the Bank by virtue of this section are

vested in the Bank and may be enforced

against the Bank;

(d) all contracts, agreements, leases and

undertakings made by the Bank and all

securities lawfully given to or by the

Bank and in force immediately before that

day shall have effect as contracts,

agreements, leases and undertakings by and

with the Bank and may be enforced by and

against the Bank accordingly;

(e) all debts due and moneys payable by the

Bank and all claims, liquidated or

unliquidated, recoverable against the Bank

shall be debts due and moneys payable by

and claims recoverable against the Bank;

(f) any legal or other proceedings that might,

but for this section, have been continued

or commenced by or against the Bank may be

continued or commenced by or against the

-32-

Bank.

(2) A reference -

(a) in a law of The Bahamas; and

(b) in any document,

in force immediately before the date of the coming into

operation of this Act to the Bank shall be read, deemed and

taken to refer to the Bank.

(3) The persons who immediately before the coming

into operation of this Act were appointed the Governor and

Deputy Governor under the repealed Act shall continue under

the title of Governor and Deputy Governor respectively under

this Act as if those persons had been appointed under this Act

on the same terms and conditions for a term expiring on the

day on which the appointment under the repealed Act would

expire.

(4) Any officer or servant appointed or employed

by the Bank shall continue in office or employment with the

Bank on the same terms and conditions as existed before the

coming into operation of this Act.

Savings.

granted by the Bank 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 by the Bank;

(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.

44. Any licence, authority, approval or exemption

SCHEDULE (Section 3(5))

-33-

THE BANK

THE BOARD OF DIRECTORS

1. (1) The Board of Directors shall consist of the

following persons to be appointed by the Governor-General,

that is to say -

(a) a Governor, who shall be a person of

recognised experience in financial matters

and shall be appointed by the

Minister by instrument in writing for a

period not exceeding five years and shall

be eligible for re-appointment; he shall

be appointed on such terms and conditions

as may be set out in his instrument of

appointment, and such terms and conditions

may not be altered to his disadvantage

during his tenure of office;

(b) two Deputy Governors, who shall perform

the functions conferred on them by this

Act and, under the supervision of the

Governor such other functions as may be

conferred on them by the Board;

(c) two other directors, being persons

appearing to the Governor-General to have

wide experience in, and to have shown

capacity in, financial or commercial

matters, industry, law or administration.

(2) The Board may make bye-laws regulating the

conduct of the Bank’s business and may make regulations and

issue orders for the purpose of giving effect to the

provisions of this Act.

-34-

(3) Paragraphs 2 to 10 shall have effect in

relation to the Board.

2. (1) Each director shall, subject to the provisions

of this paragraph, hold and vacate his office in accordance

with the terms of his appointment and shall, on ceasing to

hold office, be eligible for re-appointment.

(2) The Deputy Governors shall not be appointed or

re-appointed for a period exceeding five years.

(3) A director other than the Governor or the

Deputy Governors shall not be appointed or re-appointed for a

period exceeding four years.

3. (1) The Governor and the Deputy Governors shall

not while holding office as such hold any other office or

employment, whether remunerated or not, without the prior

approval of the Governor-General.

(2) Subject to sub-paragraph (1), a person may not

be appointed or remain a director who -

(a) is a member of either House of Parliament;

or

(b) is a director, officer or servant of, or

is a shareholder of, or has a controlling

interest in, any financial institution.

4. The Governor-General may appoint any person

eligible to be appointed a director to act temporarily in the

place of any director who is absent or unable to act.

5. Any director may at any time by notice in

writing to the Governor-General resign his office.

6. If the Governor-General is satisfied that a

director -

(a) has been absent from meetings longer than

three consecutive months without the

permission of the Board;

-35-

(b) has become bankrupt or made arrangements

with his creditors;

(c) is incapacitated by physical or mental

illness; or

(d) is otherwise unable or unfit to discharge

the functions of a director,

the Governor-General may declare his office as director to be

vacant and shall notify that fact in such manner as the

Governor-General thinks fit, and thereupon that office shall

become vacant.

7. The names of all the directors and every

change therein shall be published in the Gazette.

8. The Bank shall pay to the directors such

remuneration (if any), whether by way of salary, honorarium or

fees, as the Governor-General may determine and, if a person

ceases to be a director and it appears to the Governor-General

that there are special circumstances which may make it right

that the person should receive compensation, the Governor-

General may require the Bank to pay to that person a sum of

such amount as the Governor-General may determine.

9. (1) The Governor, or in case of his absence or

disability, a Deputy Governor, shall -

(a) preside as chairman at the meetings of the

Board;

(b) serve as chief executive officer of the

Bank responsible to the Board for the

execution of its policy and the management

of the Bank;

(c) except as may otherwise be provided in

this Act, the bye-laws of the Bank or the

resolutions of the Board, have the power

-36-

to act, contract, and sign instruments and

documents on behalf of the Bank and,

pursuant to the resolutions of the Board,

delegate such power to other officers of

the Bank.

(2) The Deputy Governors may attend all meetings

of the Board but shall not have the right to vote at those

meetings.

(3) Notwithstanding sub-paragraph (2), where a

Deputy Governor presides as chairman under sub-paragraph

(1)(a) he shall have the right to vote.

(4) The Governor and the Deputy Governors shall

devote the whole of their professional services to the Bank

and while holding office shall not without the approval of the

Minister -

(a) receive any salary or supplementation

thereto from any source other than the

Bank;

(b) occupy any other office or employment,

whether remunerated or not.

(5) Notwithstanding sub – paragraph (4), the

Governor may -

(a) act as a member of any board, committee or

commission established by the Government;

(b) become a Governor, director or member of

the board, by whatever name called, of any

international bank or international

financial institution of which The Bahamas

is a member;

(c) become a director of any corporation in

The Bahamas in which the Government is a

-37-

participant.

10. (1) The Board shall meet as often as may be

required for the due performance of its functions, and in any

case at least once in every month.

(2) A meeting of the Board -

(a) may be convened by the Governor or, in his

absence, a Deputy Governor; or

(b) shall be convened on the written

requisition of two directors specifying

the reasons for which the meeting is

required.

(3) Meetings of the Board shall be presided over

by the Governor or, in the event of his inability to act, by

a Deputy Governor.

(4) Three directors (of whom one shall be either

the Governor or a Deputy Governor) shall form a quorum at any

meeting.

(5) A decision shall be adopted by a simple

majority of the directors present and in the case of an

equality of votes the person presiding at the meeting shall

have and exercise a casting vote.

(6) A director who is directly or indirectly

interested otherwise than as a director or in common with

other directors in a contract or other transaction made or

proposed to be made by the Bank, shall disclose the nature of

his interest at the first meeting of the Board at which he is

present after the relevant fact have come to his knowledge and

any such disclosure shall be recorded in the minutes of the

Board and after the disclosure that director shall not take

part in any deliberation or decision of the Board with respect

to that contract or transaction.

(7) Minutes of each meeting of the Board shall be

-38-

kept in such form as the Board may determine.

(8) No act or proceeding of the Board shall be

invalidated merely by reason of any vacancy in the Board or of

any defect in the appointment of a director.

(9) No action, suit, prosecution or other

proceedings shall be brought or instituted personally against

any director in respect of any act done bona fide in pursuance

of the execution or intended execution of this Act.

(10) Where any director is exempt from liability by

reason only of the provisions of sub-paragraph (9) the Bank

shall be liable to the extent that it would be if that member

were an employee or agent of the Bank.

STAFF

11. The Bank may appoint and employ at such

remuneration and on such terms and conditions as it thinks

fit, such officers, servants and agents as the Board considers

necessary for the due discharge of the functions of the Bank.

12. The Bank shall have power -

(a) to pay to or in respect of officers or

servants of the Bank such pensions or

gratutities;

(b) to make such payments towards the

provisions for them of pensions or

gratutities; or

(c) to maintain for them such pension schemes

(whether contributor or not),

as the Bank may determine.

AUTHENTICATION OF DOCUMENTS

13. (1) The seal of the Bank shall be kept under the

-39-

control of the Governor or the Deputy Governor and the

affixing thereof shall be authenticated by the signature of

the Governor or the Deputy Governor and one other director

authorised by the Board to act in that behalf.

(2) Any document purporting to be a document duly

executed under the seal of the Bank shall be received in

evidence and shall, unless the contrary is proved, be deemed

to be a document so executed.

-40-

ARRANGEMENT OF SECTIONS

PART I

PRELIMINARY

1. Short title and commencement.

2. Interpretation.

PART II

ESTABLISHMENT AND FUNCTIONS OF THE BANK

3. The Central Bank of The Bahamas.

4. Places of business, etc.

5. The Bank’s functions.

PART III

CAPITAL AND RESERVES

6. Capital of the Bank.

7. General Reserve.

PART IV

CURRENCY

8. Currency of The Bahamas.

9. Parity of the dollar.

10.Contracts, etc.,deemed to be in Bahamian currency.

11.Sole right of Bank to issue notes and coins.

12.Issue, etc., of notes and coins.

13.Denominations and forms of notes and coins.

14.Legal tender.

15.Damaged currency, etc.

16.Exemption from stamp duty.

-41-

PART V

GOLD, FOREIGN EXCHANGE, EXTERNAL RESERVE, ETC.

17.Powers of Bank in relation to foreign exchange, etc.

18.External reserve.

PART VI

RELATIONS WITH THE COMMERCIAL BANKS

19.Statutory Reserve.

20.Liquid assets.

21.Power of Governor to fine.

22.Credit controls.

23.Bank as banker to commercial banks.

24.Transfer of money.

25.Clearing house.

PART VII

RELATIONS WITH THE GOVERNMENT

26.Bank as banker to the Government.

27.Bank as agent for Government.

28.Advances to the Government.

PART VIII

GENERAL POWERS OF THE BANK

29.Powers of the Bank.

30.Prohibited activities.

PART IX

ACCOUNTS, STATEMENTS AND AUDIT

31.Financial year.

-42-

32.Publication of accounts.

33.Publication of statements.

34.Audit.

PART X

MISCELLANEOUS

35.Information may be required from financial institutions.

36.Assistance in obtaining information.

37.Supplying false statement.

38.Confidentiality.

39.Offences.

40.Offences by corporations.

41.Exemption.

PART XI

REPEAL, TRANSITIONAL, ETC.

42.Repeal.

43.Transitional provisions.

44.Savings.

SCHEDULE.

 

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