NASSAU, BAHAMAS — The use of electronic payment instruments increased in 2022 according to the Central Bank, most notably with the value of debit card transactions increasing by nearly 17 percent to $2.3 billion.
The Central Bank in its Financial Stability Report for 2022 noted that in terms of other electronic-based payment instruments, the value of debit card transactions grew by 16.6 percent to $2.3 billion.
“Similarly, during the review year, credit card usage rose by two percent to $221.2 million. As it relates to ATM transactions, the number was higher, by 9.6 percent at 8.9 million, and the attendant value firmed by 11.9 percent to $2.1 billion,” the regulator indicated, adding that the improvements registered in electronic payments usage during the review year are reflective of banks’ ongoing efforts to encourage customers to utilize more digital payment options, as well as many individuals’ acceptance of digital and contactless payments brought on by the pandemic.
The regulator also noted that the financial stability of The Bahamas remained robust in 2022. The regulator in its Financial Stability Report noted that in August 2022 it eased minimum qualification standards for personal loans, allowing for a higher total debt service ratio (TDSR) of 50 percent, thus enabling financial institutions to seize new lending opportunities while maintaining prudent risk management policies.
Furthermore, the Central Bank loosened lending rules for domestic banks and credit unions to encourage domestic credit expansion, considering the country’s increased capacity to sustainably absorb more credit and the positive outlook for external reserves. Despite this relaxation, the regulatory focus remained on reducing the level of non-performing loans (NPLs) in the banking system.
Efforts to strengthen risk management policies continued in 2022, as the Central Bank finalized its Basel Capital Regulations, 2022, taking a proportional approach based on the size and complexity of SFIs. The Bank also made progress on the prudential treatment of digital assets, adopting a stance similar to the Basel Committee, ensuring a “same risk, same activity, same treatment” principle, with cautious measures for unbacked crypto assets and algorithmic stablecoins.
A sustained focus on Anti-Money Laundering (AML) and Terrorist Financing (TF) risks remained a priority for the Central Bank. Regular assessments and self-assessments of SFIs’ ML/TF risks and controls were conducted, and Electronic Money Service Providers (EMSP) were included in AML Data Return submissions for the first time.
Additionally, the Bank implemented an automated tool to monitor cross-border payments, enhancing insights on relevant patterns and counterparties.
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