The Central Bank of The Bahamas (CBOB) announced yesterday that it will resume exchange control consideration of applications for dividend repatriation by commercial banks beginning in March 2021.
CBOB Inspector of Banks and Trust Companies Charles Littrell said in the just released Quarterly Letter on Regulatory and Supervisory Developments that this will lift the suspension that was imposed at the onset of the pandemic-related slowdown in foreign exchange inflows, in March and April 2020.
“For dividends approved prior to March 2020, commercial banks will be required to update their repatriation schedules and obtain amended exchange control approvals. Otherwise, the prudential assessments mentioned above will continue to affect dividend approvals,” he said.
“This policy shift nevertheless anticipates continued multi-year schedules for dividend remittances and lessening uncertainty about when private sector foreign exchange inflows are expected to begin to recover.”
The suspension of the approval of dividend payments for commercial banks was one of four steps taken by the Central Bank toward protecting and increasing foreign reserves, which were threatened at the start of the COVID-19 pandemic when tourism came to a halt.
Along with the other measures, it was expected to provide a $300 million buffer. In May, Central Bank Governor John Rolle said it had the dual effect of keeping buffers in place for an expected increase in credit losses and halting remittances abroad.
Additionally, commercial banks had been given a more relaxed margin within which to sell foreign exchange to the public, before they are able to draw on the Central Bank’s foreign reserves to make sales to the public.
Foreign currency reserves are currently around $2.2 billion.
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source https://thenassauguardian.com/central-bank-to-lift-suspension-on-dividend-repatriation-by-commercial-banks/
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