Financial institutions, and in particular deposit taking banks have a particular role and critical position in society. The structure of the financial system requires sector wide confidence. A trust-based and thus fiduciary regime strengthens the unlimited potential of money creation. The principles of a free market economy where contract parties can decide on the details of their arrangement without restrictions must be protected. Yet, bank panic and a run on the liquidity of financial institutions must simultaneously be avoided. As such, regulators have formulated a deposit protection framework to maintain public confidence in a local financial system by securing pre-defined and maximized account deposits at local banks.
The Deposit Insurance Corporation of the Bahamas is responsible for the protection of the stability of the Bahamian dollar. As such, licensed banking institutions and credit unions that hold deposits in Bahamian dollars are required to participate in the scheme. Other currencies are exempted from insurance coverage and require private solutions or regulatory intervention. For non-resident licensees, such as the recently failed Lucayas Bank Ltd, the structure of the banks capital is critical to protect creditor and stakeholder interest.
The participants in the Bahamas Deposit Insurance Fund include the following financial institutions:
- Ansbacher (Bahamas) Limited
- Bank of The Bahamas Limited
- The Bank of Nova Scotia Trust Company (Bahamas) Limited
- Citibank N.A.
- Commonwealth Bank Limited
- Fidelity Bank (Bahamas) Limited
- Finance Corporation of Bahamas Limited
- FirstCaribbean International Bank (Bahamas) Limited
- RBC Royal Bank (Bahamas) Limited
- RF Bank & Trust (Bahamas) Limited
- Scotiabank (Bahamas) Limited
- Bahama Islands Co-operative Credit Union Limited
- Bahamas Law Enforcement Co-operative Credit Union Limited
- National Workers Cooperative Credit Union Limited
- One Eleuthera Cooperative Credit Union Limited
- Public Workers’ Co-operative Credit Union Limited
- Teachers & Salaried Workers Co-operative Credit Union Limited
- The Grand Bahama Co-operative Credit Union Limited