NASSAU, BAHAMAS- The Central Bank of The Bahamas is cracking down on the misuse of resident foreign currency accounts, warning that attempts by individuals and local companies to route payments in foreign currency into these accounts are not permitted without explicit approval. Under Exchange Control Regulations, resident-operated foreign currency accounts are authorised only to receive foreign currency revenue or approved loan proceeds and can be used solely to fund obligations outside The Bahamas. The notice comes after the Bank observed an increase in attempted transactions between resident individuals and companies that did not comply with existing regulations, highlighting the need for greater clarity around the proper use of foreign currency accounts.
In a detailed statement on Tuesday, the Central Bank emphasized that “all domestic payments between residents, including salaries and business transactions, must be made in Bahamian dollars and credited to the recipient’s Bahamian dollar account.” The Bank further clarified that commercial banks are not permitted to process local payments in foreign currency except in cases where prior approval has been granted. It reiterated that foreign currency accounts maintained outside The Bahamas require the specific prior approval of the Central Bank, while accounts maintained locally may be authorised directly by the Bank or through authorised dealers for business trade-related transactions with balances up to B$100,000.
The Central Bank also underscored that the delegated authority granted to commercial banks applies strictly to bona fide external transactions where payment is to be made outside The Bahamas. Any conversions of Bahamian dollars for the purpose of making payments into local foreign currency accounts must first receive explicit Central Bank approval. Resident individuals are defined as Bahamian citizens living in The Bahamas, persons designated by the Central Bank, or permanent residents without employment restrictions, while resident entities are companies owned by such individuals or similarly designated by the Bank. The statement concluded by emphasizing that exceptions to these rules are rare and require the explicit consent of the Central Bank, reinforcing its commitment to maintaining the integrity of the country’s foreign currency and financial system.
