Business

Central Bank releases hurricane preparedness codes of practice for SFIs

The Central Bank of The Bahamas (CBOB) released yesterday, two codes of practice for supervised financial institutions (SFIs) in the event of a catastrophic hurricane.

The code calls for financial institutions to implement systems for effective communication with clients and for managing staff issues before, during and after a major natural disaster.

Charles Littrell, the bank’s inspector of banks and trust companies, said the need for these codes of practice arose from the results of the Central Bank’s 2020 hurricane preparedness industry survey.

“As a broad observation, the banking and trust industries already possess robust plans for protecting their data, systems and buildings, but the resilience of their post-hurricane customer communications and staff management could be improved,” he said.

“At the Central Bank’s invitation, the Clearing Banks Association (CBA) and the Association of International Banks and Trusts (AIBT) established two industry working groups. The working groups created two codes of practice. The Central Bank thanks the CBA, the AIBT and the working group members for their efforts in making the Bahamian banking sector more hurricane resilient. Neither code represents formal regulation from the Central Bank and they are not statutorily enforceable. The Central Bank will be guided by the codes, however, in its examinations and supervision.”

The CBOB is now requiring SFIs to maintain at least two methods of contact with each client, with an expectation that at least one of these methods is electronic and noted that a physical address is no longer a required method of contact.

“Ensure at least two forms of contact other than a mailing address are obtained when accounts are opened. Efforts are to be made on an ongoing basis to ensure existing client accounts have at least two forms of contact other than a mailing address. SFIs should verify the information held and where appropriate, follow up with clients to ensure contact information is updated. As a matter of good practice, ensure that at least one of these forms or both should be documented to the client’s file,” the bank stated.

“SFIs should collect but need not verify, by utility bills or other means, personal mailing addresses for clients. However, SFIs may wish to consider verification of clients where possible, by review of their active digital product users. SFIs should encourage relevant clients to sign up for debit cards and digital wallet products such as the Sand Dollar, or avail themselves of other digital products for cashless payment of goods and services.”

SFIs are also being encouraged to establish communication protocols for staff in the event of a catastrophic storm, consider evacuation and relocation of staff that may be impacted by a storm and implement staff assistance programs that would include relocation accommodations, travel assistance, early payroll advance, care packages and electronic payment support.

“SFIs should consider the applicability of staff assistance programs in the context of their size, complexity, the risk appetite and business continuity plans. It is at the SFI’s discretion to determine the level of assistance it will provide. The SFI should assess the sufficiency of assistance programs at the beginning of the hurricane season,” the bank stated.

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Paige McCartney

Paige joined The Nassau Guardian in 2010 as a television news reporter and anchor. She has covered countless political and social events that have impacted the lives of Bahamians and changed the trajectory of The Bahamas. Paige started working as a business reporter in August 2016. Education: Palm Beach Atlantic University in 2006 with a BA in Radio and Television News

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