The government is seeking to establish a Dormant Funds Investment Committee of The Central Bank of The Bahamas (CBOB), the newly tabled Central Bank of The Bahamas Bill, 2020 revealed.
This committee would consist of the financial secretary or his/her designate, two officers of the CBOB, a financial expert and one other person who has not been a director, deputy governor or employee of the bank for at least three years prior to appointment.
According to The Central Bank of The Bahamas’ 2019 annual report, as of December 31, 2019, as much as $91.8 million sits in more than 43,888 dormant accounts, including $58.7 million in more than 7,500 U.S. dollar accounts. This includes the approximately $40.5 million which was transferred to the government during March 2019.
The objectives of the committee would be to prepare an investment policy for the fund and no later than April in each year, prepare an investment plan for the fund.
The bill stipulates that the first investment plan must be prepared no less than three months after the establishment of the committee.
“The Central Bank governor, in consultation with the minister of finance, may issue directions to the Dormant Funds Investment Committee concerning the preparation of the investment plan and the investment policy; and the committee shall comply with those directions and prepare the investment plan and investment policy in accordance with those guidelines,” states the bill, which was tabled in the House of Assembly yesterday.
The bill seeks to consolidate and modernize the law governing the CBOB and provide for the continuance of the bank, its function, powers and duties.
The bill mandates the capitalization of the CBOB at $3 million in fully paid-up, non-transferable shares solely subscribed by the government; and mandates that CBOB establish a general reserve for the purpose of covering losses sustained by the bank, as well as an unrealized revaluation reserve to account for unrealized gains and losses arising from the CBOB’s positions in foreign currencies, gold securities and other financial assets.