Central Bank advises public consultations on compendium of proposed legislative reforms

The Central Bank of The Bahamas (CBOB), in a release on its website, advised that a public consultation on a compendium of proposed legislative reforms has commenced for public consideration. “The public consultation consists of two separate papers designed to enhance the financial regulatory framework, strengthen depositor protection, and improve overall the resilience of the financial system,” the bank said on Friday. The first consultation paper outlines amendments to several key pieces of legislation, including the Central Bank of The Bahamas Act, 2020, the Banks and Trust Companies Regulation Act, 2020, the Protection of Depositors Act, 1999, The Protection of Depositors Bye-laws, 1999, The Payment Systems Act, 2012, and The Payment Instruments (Oversight) Regulations, 2017. Additionally, there will be regulatory frameworks for the Protection of Depositors (Administrative Monetary Penalties) Regulations, 2025, and Central Bank of The Bahamas (Administrative Monetary Penalties) Regulations, 2025. The release continued: “These proposed reforms aim to strengthen the resolution framework for systemically important financial institutions, including banks and credit unions; migrate money transmission service providers from the banking framework to the broader payment institutions framework, in line with global best practices; strengthen oversight of payment systems and instruments and increase the scope to regulate payments instruments in the interest of the consumer; Expand depositor protection, supported by back-up funding arrangements to ensure confidence and stability in the financial system; and introduce governance and currency reforms, including provisions for the Bahamian dollar digital currency. “The consultation paper also reflects recommendations from the International Monetary Fund following technical assistance missions and safeguards assessments, which emphasized alignment with international standards.” There will also be attempts at reforming the credit union sector. The second consultation paper will outline key amendments to legislation, including the Bahamas Co-operative Credit Unions (Amendment) Bill, 2025; and the Bahamas Co-operative Credit Unions (Amendment) Regulations, 2025. “The draft bill and regulations reflect the Central Bank’s continued efforts to promote enhanced transparency and accountability, as endorsed by international standards-setting bodies responsible for supervisory and regulatory oversight of credit unions. As such, these legislative reforms seek to advance supervisory and regulatory requirements related to corporate governance procedures, capital adequacy, and reserve requirements for credit unions.”